Home owners in the UK are remortgaging more frequently with the majority consulting a broker to find them the best home lending deal, new research shows.
January recorded the most frequent remortgaging since February 2009 with home owners doing so every four years, four months more frequently than they did in the same month in 2016.
The value of remortgage transactions also rose month on month by 7% but suffered an annual fall of 15%, from £5.8 billion in January 2016 to £4.9 billion in January 2017.
The data from conveyancing service provider LMS also shows that there was a 10% rise in remortgage activity between December 2016 and January 2017 and the firm suggests it is due to low rates, concern about rate rises and more choice.
Indeed, there is also more interest in mortgage deals for longer periods with the number of fixed five year products up four fold in January. The percentage of remortgagors with a fixed five year mortgage increased from 7% to 29%. As a result, the number of fixed two year mortgages fell.
‘When remortgaging in January, homeowners weren’t solely looking for good value but also seeking long term security, hence the increasing popularity of fixed five year deals,’ said Andy Knee, chief executive of LMS.
‘With inflation on the rise, up to 1.8% in January which was the highest since June 2014 remortgagors took advantage of January’s favourable conditions and record low rates to guard against potential upsets in the near future,’ he explained.
The research also found that 45% of remortgagors in January now expect interest rates to increase in the next year and the number of remortgagors consulting a broker also increased up to 69% from 58% in December.
Price remains the most important issue for home owners when remortgaging. Some 54% selected their lender based on them having the cheapest mortgages or lowest interest rates. Meanwhile, recommendations from brokers and advisers remain the second most popular means for selecting a lender at 27%.