Remortgage activity was strong in September – with volumes outstripping last year, UK Finance data shows.
There were 17,740 remortgages with additional borrowing, an increase of 5.9% on September 2019.
Meanwhile there were 19,140 remortgages with no additional borrowing, 8% more than the same month last year.
Nick Chadbourne, chief executive of conveyancing solutions provider LMS, said: “Overall remortgage activity is steady, with a slight bounce due to a peak in ERC expiries, but we are starting to see a shift in the balance of power within this market.
“Lower rates on 2-year deals have sparked competition between lenders, aiming to turn the heads of remortgagers, and borrowers have been taking advantage.
“Recent LMS data shows that although 5-year fixes remain the most popular product, purchases of 2-year deals have surged and closed the gap to just a few per cent.
“It’s tough to call whether this will continue as we move into the new year, but with low rates and slow price growth set to stay, we can be sure that the remortgage market is in good health.”
The number of first-time buyer and homeomover mortgages also rose year-on-year, by 1.6% and 1.8% from September 2018.
Buy-to-let activity was down however, as there were 3.5% fewer purchase mortgages year-on-year.
John Phillips, national operations director, Just Mortgages, said: “This is a strong set of figures, with both new loans and especially remortgages showing a big improvement on the same time last year.
“The 8% rise in pound-for-pound remortgages in particular is a welcome reversal of recent trends, where the increased prevalence of longer-term fixes has been driving down volumes.
“This is somewhat offset by the quite steep fall in new buy-to-let mortgages – more than 11% by value.
“There have been a number of changes to regulations in recent years, not to mention the impact of the stamp duty surcharge for buy-to-let.
“It would not be surprising if this was deterring landlords from expanding their portfolios and putting new entrants off altogether.”
Source: Property Wire