A total of 38,475 remortgage transactions were made in April, an 8% rise from the 35,500 deals made in March, according to conveyancing service provider, LMS.
The number of deals also increased annually, by 10%, from 34,700 in April 2016.
The value of remortgage lending increased 2% month-on-month to £6.1 billion. The increase in remortgaging activity comes as the CML reports total mortgage lending fell by 11% from £20.7 billion in March to £18.4 billion in April. Therefore, according to LMS, remortgaging accounted for 33% of total lending for the month, up from 28% in March.
Homeowners turned to remortgaging as a way to ease pressure on the family budget. 15% remortgaged to unlock equity to pay off debts, a big jump from 11% who did the same in March. However, the desire to spend money on home improvements remains the most popular remortgage driver, with 24% choosing to do so in April.
Andy Knee (pictured), chief executive of LMS, said: “The remortgage market had a good month in testing conditions. With total mortgage lending falling, the market share of remortgaging increased to 33% from 28% in March. The number of deals increased annually by 10% and month-on-month by 8%.
“In the next few months, the General Election and Brexit negotiations will cast a shadow of doubt over the future of the purchase market. Homeowners should seriously consider remortgaging now while rates remain low and in case market conditions worsen significantly.”
Elsewhere, with the average mortgage rate remaining at 2.13%, remortgagors sought to fix for longer. Of those who remortgaged in April, 34% fixed for five years, in contrast to 8% who previously had a fixed five-year deal. This continues the trend of homeowners fixing onto longer term deals, in search of security, which has been prevalent in the last three months.
With real wages falling by 0.2% in the first three months of the year, and family finances in a more delicate state than usual, a greater number of remortgagors consulted a broker in April. 72% consulted a broker, in comparison to 63% who did so in March.
This is the result of homeowners looking to make the best savings possible, with 57% citing this as their motive for consulting a broker in April, in comparison to 47% in March.
Knee added: “The fall in real wages in the first three months of the year has placed a real strain on family finances. Despite this, it is encouraging to see increased numbers of homeowners planning their finances in advance by remortgaging in order to pay off debts, and consulting with brokers in the process, to ensure they get the best possible deal.”