Conveyancing solutions provider, LMS, has published its latest weekly update, tracking remortgage market performance through the Covid-19 crisis.
The update includes LMS’ proprietary data on remortgage instructions, completions, cancellations and pipeline activity.
Full-month comparisons given in this update reflect the whole of March 2020 against the whole of April 2020.
Overall instruction volumes are down 23% between March and April, which is the result of a sharp drop at the start of the month. LMS then saw a couple of weeks where volumes plateaued at subdued levels; however the market has now seen growth in instruction volumes two weeks running, with an increase of 11.8% between the w/c 20th and w/c 27th April.
Completions remained flat through to the end of April, falling just 1% from March volumes.
LMS said that, as is the case in most months, there was a significant spike in completions on the first working day of May, and this outstripped performance in each of the last two months as many ERCs expired. Completions on the first working day increased by 63.7% from 1st April, and by 74% from 2nd March. Completions were also 8% higher than this time last year (1st May 2019).
Pipeline numbers at the end of April decreased by 2.5% from the end of March. Instructions exceeded cancellations and completions at the beginning of April, but this trend reversed through the month as cancellations slowly increased, completions remained strong and instructions were below seasonal averages. LMS said this is a usual trend over the Easter period and is comparable to 2019 figures. Increased completions at the start of May will further reduce pipelines, which again is typical for this time of the year.
Cancellation levels slowed in the second half of April, dropping by 18.7% from the week commencing 20th April to the week commencing 27th April. However, April still ended with a cancellation rate of 7.11%, which is 1.72% higher than March. This led to a 31% increase in the raw number of cancelled transactions from March to April.
April 2020’s cancellation rate was 2.58% higher than April 2019, equating to an increase of 28.8% in the raw number of cancelled transactions.
Nick Chadbourne (pictured), CEO of LMS, said: “The remortgage market had a flying start to May, with a sizeable increase in completions across the first two working days of the month. Performance far exceeded both March and April, which clearly shows the market is working well.
“There’s definitely still work to be done on the processing of more complex cases around witnessing documents and validating ID. This is something we need the whole industry to collaborate on if we are to find solutions that ensure all customers are serviced, but overall there are hugely encouraging indications that the industry is coping incredibly well.
“Net numbers are set to be comparable with 2019, and it’s pleasing to see the continuation of normal seasonal trends. This is such a positive sign after the initial shock of lockdown, and small variations can be expected in the remortgage market, so slight falls in some areas aren’t cause for alarm. Cancellation rates need to be monitored but at this stage are not materially impacting the overall market.
“Completion numbers show that the market remains in good shape, with FAR conveyancing firms continuing business as usual and the hard work across the industry paying off. If short-term cancellations and a potential medium-term economic shock can be managed, we’re optimistic that the market will remain strong as we move towards the summer.”