Remortgages are down almost 20% representing a definite cooling period in the UK housing market.  The figure is in line with other activity in the market including fewer houses sold during the month of May compared with April.  The total amount of remortgage pounds during the month of May fell to 3.3bn, down from £4bn in the month of April, according to the Council for Mortgage Lenders.

The average amount of remortgage has also dropped to £155,448, which is a decrease of almost 5% from the previous month.

The spring bounce each year is typically a time when activity in the housing market including remortgages increases.  So far this has not been the case.  Many close to the housing market are now breathing a sigh of relief that the possibility of a housing bubble is less likely due to the latest figures indicating a cooling of the market overall.  

Andy Knee, Chief Executive of LMS commented on the activity of the remortgage market which is quite indicative of the health of the housing market in general, saying: “Remortgaging continues to lead the market slowdown as lenders tighten their lending criteria, pre-empting any government cap to tackle concerns about an overheated mortgage market. In some cases customers have been put off by the less competitive rates now on offer, as lenders raise rates to give themselves some breathing space as they get to grips with MMR.

“We expect remortgage lending to recover strongly in the months ahead when lenders fully adjust to the system, rates improve and a base rate rise finally happens. In fact some lenders have already reported increased enquiries to switch following Mark Carney’s comments last week.”

Knee continued: “That the average amount of equity being released through remortgaging saw a 44% increase since last month – the highest figure since November last year – indicates that household finances are still under pressure. But a welcome respite can be seen with inflation falling to four-year low which should begin to ease pressures on the purse-strings.”