2014 sees largest remortgage loan ever recorded
This year has seen the largest amount ever recorded for an average remortgage loan, with the figure standing at £163,161, according to new figures.
Rising house prices have pushed remortgaging loans up and the increases is nine per cent higher than in June last year, and five per cent up from May.
Rising property values means homeowners are able to remortgage for record loan amounts without increasing the LTV ratio, ensuring they preserve their current competitive rate.
Monthly gross remortgage lending saw an increase of 11 per cent in June to £3.7bn, up from the £3.3bn in May reported by the Council for Mortgage Lenders (CML) last week and is up 5 per cent from last year.
The data compiled by Legal Marketing Services, one of the UK’s largest providers of outsourced property services, also estimates that the number of remortgage loans rose four per cent to 22,486 in June.
This figure is, however, down by 12 per cent from this time last year, when there were 25,600 remortgage loans recorded.
The remortgage market share now equates to 21 per cent of the total market, a rise from 20 per cent last month but down from 23 per cent in June last year.
Andy Knee, Chief Executive of LMS said: “Continued house price rises are clearly having an effect as the remortgage loan increased in value to its highest ever amount, yet LTVs remained constant at 58% from last month. Importantly to customers, at a time when affordability is key, this means they remain eligible for competitive LTV rates.
“In London — where house prices are highest — this can be seen most acutely. The huge amount of equity seen in property there allows people to remortgage far larger sums than elsewhere while keeping the smallest LTV of any other region. As ever, London can be seen to be playing a whole other ball game from the rest of the UK.”
LMS’s UK remortgage lending estimates are based on LMS’s up to date internal conveyancing data, which covers thousands of remortgage completion transactions every month.