Remortgage Cancellations Increase In June
Conveyancing service provider LMS have found that remortgage cancellations have continued to rise, which it describes as ‘a cause for quite concern’ that will need to be monitored over the coming months.
In the first week of June, remortgage cancellations increased by 45.8% compared to the first week in May, and was 92% higher than the previous year.
LMS has stated that there may be a reason; as mortgage providers, on returning to pre coronavirus workings, are clearing inactive and old cases that may have expired.
This would corroborate with the increase in remortgage instructions that have seen a 6% increase that the levels sen in 2019. LMS stated that it was a ‘positive sign of overall market health improving and returning to normal.’
Volumes of instructions for the first week of June also saw an increase of 7.3% from the first week of May.
June completion volumes have been reduced from those recorded in May, but this may be linked to the expiry of seasonal early redemption charges, as ‘June is historically a quieter month.’
One worrying figure however was that completion volumes are down 30.2% compared to volumes in the first week of May. If completion volumes continue to decrease and remortgage cancellations continue to rise more than instruction volumes, this will cause June’s pipeline to contract and could potentially impact July and August, that have historically been the busier months.
Nick Chadbourne, CEO of LMS, commented:
“The first week of June marks another consistent week of healthy instruction volumes.
“We are seeing a continued return towards stability in this area, with a consistent increase in new cases coming onto the books.
“It is particularly promising to note that when making year on year comparisons between June 2019 and June 2020, we are seeing increased volumes at present.
“Increasing cancellations volumes are cause for quiet concern and something we will continue to monitor as the month continues.
“Rising levels could be caused by offers from Q4 2019 expiring and firms clearing out aged cases at the beginning of the month.
“Moreover, as the COVID-19 crisis continues and borrowers’ circumstances continue to change and new deals enter the market, previously attractive offers may become unappealing.
“This could be having a knock-on effect as borrowers look to change deals and ensure they are getting the best available product at that time.”