Conveyancing solutions provider, LMS, has released new figures which tracked remortgage market performance through the COVID-19 crisis and subsequent lockdown measures.
According to the data, overall, instruction volumes increased by 8.1% from April 2020 to May 2020, a result of remortgaging becoming more accessible with the easing of lockdown. The final week of the month finished on a healthy level, with volumes 13.3% higher than in the final week of April.
Month on month, we are seeing completion volumes steadily climb to near pre-Covid levels. May finished with completion volumes 15.5% higher than April, and just 10% lower than those in February.
The overall pipeline decreased by 4.8% throughout May. Despite instructions, completions, and cancellations all rising from April to May, completions and cancellations increased at rates of 15.5% and 16.8% respectively, while instructions rose at a rate of 8.1%, leading to a decrease in pipeline volumes.
While it is usual for pipeline volumes to decrease over the summer months, overall pipeline numbers remain below volumes in the same period last year (2019), with May 31st volumes showing an overall decrease of 12.7% between 2019 and 2020.
Cancellation levels have decreased for the third consecutive week. The final week in May saw a reduction of 35.3% in cancellations from the previous week as borrowers’ confidence grew. Despite cancellations decreasing towards the end of the month, the high volumes we saw at the start of May have led to overall monthly cancellations from April to May increasing by 16.8%.
Overall, the cancellation rate in May 2020 was 7.38%, which is 3% higher than the rate in the same period during May 2019.
Nick Chadbourne, CEO of LMS said, “The last two weeks of May have seen a clear uplift in new activity paired with a marked reduction in cancellations. This is likely to have been triggered by the governments’ measures to ease lockdown restrictions, enabling property access and the operation of services to resume.
“Despite improving borrower confidence and signs of market improvement, Covid-19’s effect on the market is still prominent. Year on year monthly comparisons show reduced volumes of transactions and it’s clear the market remains turbulent in line with the wider economic environment.
“However, technological advancements and industry collaboration have supported the market and enabled the range of available products to continue to expand. Borrowers have taken advantage of greater availability, which has had a knock-on effect on reducing the pipeline backlog as instructions continue to increase, cancellations decrease, and completions become more efficient.
“Looking forward to June, the steady pipeline activity we have seen throughout May indicates a gradual return to normality, as instructions and completions rose, while the case backlog continued to clear.
“FAR continues to support borrowers through these times, offering the most efficient and secure service to maintain the climbing completion volumes in line with growing instructions. LMS persists in our objective of bringing together lenders, lawyers and borrowers to support and develop a healthy remortgage market through the crisis.”