Monthly gross remortgage lending has fallen to the lowest value recorded since June 2013 and the worst October since 2010, new data has revealed.
According to the latest figures from Legal Marketing Services, monthly gross remortgage lending saw a decrease of 20 per cent in October to £3.5bn, down from the £4.4bn in September reported by the Council for Mortgage Lenders.
The number of remortgage loans fell by 15 per cent to 23,505 in October,
This figure is also down 21 per cent from this time last year, when there were 29,700 remortgage loans recorded and is the lowest number ever recorded in the month of October. It is also the smallest number on record since February 2013.
The average remortgage loan has fallen to £149,715, a 6 per cent decrease from last month and just 0.3 per cent higher than the average loan of £149,282 in October 2013.
The remortgage market share equates to 19 per cent of the total market, 5 per cent lower than last month and down from 24 per cent in October last year
Andy Knee, chief executive of LMS, said: “Despite signs that remortgaging had taken a turn for the better, this month saw that assumption come crumbling down, with the worst October we’ve experienced since during the midst of the recession.
“Even with the competitive rates on offer, customers appear hesitant to take advantage of these perhaps, in part, due to the increased regulation of MMR or the introduction of loan to income caps.
He explained that it remains to be seen whether lower house price growth and loan approvals are a permanent trend, or simply a slowdown in the lead up to Christmas.
“Hopes for greater stability in 2015 across the remortgage market are likely to be thrown off course by uncertainty ahead of the election, changing attitudes towards a base rate rise from the Bank of England and, potentially, the impact of greater economic instability in the eurozone on the UK market.”