Mortgage costs rising

Remortgagors increased their monthly payment by £224 in March, indicating that costs are rising and people are taking on bigger loans.

Some 46% of borrowers increased their loan size in March, while 63% took out a 5-year fix, clearly in an attempt to shelter themselves from further Bank of England base rate rises.

The research, from LMS, found that 29% remortgaged to release equity from their property, indicating that investors are looking to free up funds to spend elsewhere.

Nick Chadbourne, chief executive of LMS, said: “Consumer demand is high; the focus needs to be on managing capacity in the supply chain.

“While the figures show a drop in completions, this is entirely expected given the ERC peak at the start of April. The fact that the pipeline grew shows you just how many cases were there waiting for the ERC to drop off.

“Similarly, while remortgage instructions are also down month on month, this is most likely because many lenders have responded to heightened levels of uncertainty around the cost of living squeeze by pulling products from the market and evaluating affordability more closely. They are also establishing what capacity they have across the board – underwriting, surveying and conveyancing – so it will be vital for the sector to work out how the supply chain can manage sustained volumes throughout the year.

“Working closely with their suppliers, lenders will be looking to assist borrowers by providing competitive fixed rates to give surety of costs while dealing with such pressure, and efficient collaboration between all parties will ensure the effective implementation of tech that can help speed up the entire remortgage journey.”

The average remortgage loan amount in London and the South East was £306,318, compared to £140,179 for the rest of the UK.

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