Over three quarters (76%) of remortgage applications via intermediaries resulted in a completion during Q2 2018 – up from 70% in the previous quarter – as activity spiked ahead of the Bank of England’s decision to raise interest rates above 0.5% for the first time since 2009, according to the latest Mortgage Market Tracker from IMLA.
For the second time in the last twelve months, the number of homeowners acting to protect themselves from the effects of higher rates and secure the most affordable deals on offer increased in the quarter directly before a much-anticipated, albeit modest, increase in the Bank of England’s base rate. A similar spike in activity occurred in Q3 2017 – ahead of the first rate rise in a decade in November, from 0.25% to 0.5%. At that time, 78% of applications led to completions, an increase from 59% in the previous year.
Data from UK Finance shows that 115,00 homeowner remortgages were completed in Q2 2018, with a combined value of £20.7bn. The volume of remortgages in June alone increased by 8.4% compared to a year earlier, as homeowners prepared for the Bank of England’s decision.
Separate IMLA research suggests that more than one in ten (11%) brokers expect the Bank of England to raise rates again before the end of 2018. Although the majority see no change, more than a quarter of brokers (28%) predict the remortgage market will continue to grow significantly in H2.
The quarterly IMLA Mortgage Market Tracker – which uses data from BDRC Continental – examines consumers’ success rate in securing a mortgage via the intermediary channel, by tracking their progress from initial expression of interest (seeking a ‘decision in principle’) through to completion. In doing so, it compares the fortunes of first-time buyers, home movers, remortgagors, buy-to-let borrowers and applicants for specialist loans.
Elsewhere in the market, the picture was generally positive in Q2 2018, with nearly 9 in 10 (88%) of all mortgage applications leading to offers. The vast majority (95%) of brokers reported having a confident outlook for the mortgage industry.