Remortgaging activity in January reached its highest level in eight years, with more and more homeowners consulting brokers as part of the process.
Homeowners remortgaged every four years in January – four months more frequently than in January 2016, according to new figures from conveyancing service provider LMS.
The frequency of remortgaging has improved significantly since January 2011, when the average term was six years and five months, and is now the highest witnessed since the 3 years and 8 months figure in January 2009.
And there was particularly good news for brokers, as almost seven-in-ten remortgagors (69 per cent) opted to remortgage via a broker – up from 58 per cent in December.
Recommendations from brokers and advisers are the second most popular means for selecting a lender, with 27 per cent of remortgagors doing so on the basis of advice – although price remained the number one factor (54 per cent).
Activity also accelerated at the turn of the year, with overall remortgaging activity rising 10 per cent between December and January, from 27,700 to 30,439.
The most popular deal is now the five-year fix, which saw a four-fold rise in popularity and was chosen by 29 per cent of remortgagors, while the two-year fix dropped from 42 per cent to 25 per cent.
Andy Knee, chief executive of LMS, said: “When remortgaging in January, homeowners weren’t solely looking for good value but also seeking long-term security, hence the increasing popularity of fixed five-year deals.
“With inflation on the rise – rising to 1.8 per cent in January, the highest since June 2014 – and both the Budget and Article 50 mere months away, remortgagors took advantage of January’s favourable conditions and record-low rates to guard against potential upsets in the near future.
“Almost half (45 per cent) of remortgagors in January now expect interest rates to increase in the next year so homeowners would be smart to remortgage now – before it’s too late.”
Ray Boulger, senior technical manager at John Charcol, said the fact that more and more people are consulting brokers “is good for brokers and for individuals”.
“If they go to a broker they are getting advice, whereas if they go direct to a lender it will be more limited,” he explained.
“For people on the cusp of a loan-to-value, choosing the right lender who is offering a good-value deal and being in a position to change because the value comes in lower than expected can be difficult.
“It might be a case of changing lender – and brokers are in a really good position to do that. If a client went direct to the lender, they would have to start from scratch. Using a broker can be a much smoother process from a client’s point of view.”
Read more at https://www.ftadviser.com/mortgages/2017/03/03/boost-for-brokers-as-remortgaging-hits-8-year-high/
