Taking the warnings of an impending increase to the Bank of England’s standard base interest rate, homeowners took no chances and rushed to remortgage in August. The volume of remortgages increased by 11% in August to the highest level since January at 41,497 according to LMS research data. The annual data showed an increase of 16% since August 2016 which recorded a then impressive 34,900.

The total value of remortgages in August fell by 5% from £6.7bn in July to £6.38bn in August. The data revealed that homeowners were more interested in the effort of locking in a low interest rate than releasing equity. Remortgages with five year fixed rates were grabbed up in record numbers overshadowing the record high from the previous month. In July the number of five year fixed rate remortgages increased by 37%, yet in August it grew more to 39%.

LMS chief executive Nick Chadbourne remarked, “While the total value of remortgaging has fallen, with the average amount of equity released falling by 12% in August, we are seeing a surge in the number of transactions – the number of people remortgaging hasn’t been this high since January. Remortgagors are locking into record low rates to manage the impact of potential rate rises and bolster their financial security. This makes sense given borrowers were warned that time could be running out to fix into low cost deals in August.

“According to the National Institute of Economic and Social Research, the UK economy will bounce back in 2018 – prompting the Bank of England to raise interest rates to a more normal level before Brexit. It’s no surprise 45% of borrowers we spoke to think interest rates are going to rise soon.

“Given demand for remortgaging services is likely to continue to increase, we must continue to evaluate the process to drive efficiencies to deliver increased volumes. Consequently, I am committed to ensuring LMS develops both technology and service capability to support this requirement.”