According to latest figures
The number of remortgages has risen 41 per cent year-on-year from 28,400 in December 2016 to 39,943 in December 2017 according to conveyancing service provider, LMS.
Following the increase in the base rate to 0.5 per cent in November last year, the majority of lenders passed on the full 0.25 per cent rise and also increased their standard variable rates. Around 8.1 million UK households have a mortgage, and of those almost half are on either a standard variable rate or a tracker rate. In the current climate, borrowers’ motivation to remortgage has hit its highest level since the financial crisis.
Nick Chadbourne, chief executive of LMS, said: “We are still in a ’settling-in‘ period – borrowers and lenders have yet to fully acclimatise to the current situation. But rising interest rates on trackers and standard variable rate mortgages are driving remortgage activity with borrowers highly motivated to remortgage. In this busy climate, all the stakeholders in the mortgage industry need to do what they can to make the borrowing process as simple and straightforward for consumers as possible. LMS continues to create more efficiencies to speed up and streamline the remortgage process and we’ve already invested in our technology as well as our headcount to cope with the amount of business we’re seeing.”
The rise in activity in December is likely to continue in the coming months as the base rate is predicted to rise again. In November 2017, Bank of England Governor Mark Carney said two more base rate rises were likely by the end of 2020. While the Bank kept rates on hold in February, the MPC has stressed that it sees a need for monetary policy to tighten more rapidly than it did three months before. The markets are now pricing-in the next base rate rise to occur as soon as May and for there to be at least three rate increases over the next three years. Research conducted by LMS suggests that 82% of borrowers now expect an imminent rise.