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The number of remortgages taken out in the UK increased in June, but are down slightly in value month on month and year on year, the latest data shows. The value of remortgaging is now lower than the same time last year, the first month in 2016 where the value of remortgage lending has fallen year on year, according to the figures from LMS. It means that the average amount of equity withdrawn in June has fallen by 15% year on year and 13% month on month while total equity withdrawn is 14% lower than the same time last year. Overall there were 32,873 remortgage loans taken out in June, a rise of 6% from May when there were 30,900 loans and 1% higher than June last year, when there were 32,700 However, June was the first month in 2016 where the value of remortgage lending fell year-on-year, according to LMS and suggesting a drop in momentum. Each month of 2016 saw annual increases in the value of remortgage lending but June bucked the trend, falling from £5.3 billion in June 2015 to £5.1 billion, a drop of 3%. The average amount of equity withdrawn per customer from remortgaging is also lower than last year, down 15% in comparison to June last year when it stood at £34,505. The average amount of equity release has also decreased 13% month on month from £33,691 in May to £29,375 in June. Annually, the total amount of equity withdrawn has also fallen, by 7% from £1.04 billion in May to £966 million in June. This is 14% lower than the same time last year, when equity withdrawn from remortgaging hit £1.13 billion. There is some good news for remortgagors in terms of affordability pressures. In May 2016, average household income was £45,672, recovering slightly from a 10% fall between March and April. The rise in household incomes, and because rates remained stable, means annual repayments for remortgages have fallen from £8,694 to £8,390, nearly £300 less. The monthly rise in income has therefore driven the annual repayment as a percentage of income down from 19.3% in April to 18.4% in May. ‘We witnessed a strong start to the year with remortgage lending up year-on-year each month in 2016, when in a safer, surer climate, home owners had rushed to remortgage in a desire to lock into better rates before a possible rate rise. But activity in June has slowed with the value of remortgage lending down as indecision increased in the lead up to, and following, the referendum,’ said Andy Knee, chief executive of LMS. ‘While we’ll only begin to see the referendum result’s real impact from July’s figures onwards, it is very likely the small drop occurred as people took pause amid Brexit uncertainty before making any decisions. As the terms for Brexit are negotiated, there will be… Continue reading →