Remortgaging activity rose to an eight-year high in January according to LMS, the conveyancing service provider, as homeowners remortgaged every four years in January.
This average term length is four months more frequently than it was in January last year, and substantially more frequently than the average term of six years and five months recorded in January 2011. It is the shortest term since the three years and eight months recorded for January 2009.
Furthermore, 69 per cent of remortgagors used a broker to remortgage, a rise on the 58 per cent recorded for December 2016. From December to January, remortgaging activity rose from 27,700 to 30,439, with the value of remortgage transactions rising 7 per cent.
However, there was an annual drop of 15 per cent compared to January 2016, falling from £5.8bn to £4.9bn.
Meanwhile there was a drop in popularity for the two-year fix, being chosen by just 25 per cent of remortgagors, having been 42 per cent previously. The five-year fix is now the most popular choice, quadrupling in popularity to be chosen by 29 per cent of remortgagors.
“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, LMS chief executive.
“With inflation on the rise – rising to 1.8 per cent in January, the highest since June 2014 – and both the Budget and Article 50 mere months away, remortgagors took advantage of January’s favourable conditions and record-low rates to guard against potential upsets in the near future.
“Almost half (45 per cent) of remortgagors in January now expect interest rates to increase in the next year so homeowners would be smart to remortgage now – before it’s too late,” he continued.