Remortgage demand has been on the decline despite there being millions of homeowners that have passed on switching to a new deal.  Getting moved onto their lender’s standard variable rate (SVR) may have been a good idea as interest rates remain low, but early next year rates will rise and the risk of facing climbing interest rates will evolve. Rather than taking on that risk, mortgage holders have been encouraged to prepare for the slow and steady interest rate increases the Bank of England has promised for 2015.

According to data released by Legal Marketing Services (LMS), the level of remortgage lending in October declined to the lowest value recorded since June 2013 and the worst volume recorded since 2010.

There was a decline of 20% to £3.5 billion for the first month of the last quarter of 2014. September had recorded £4.4 billion.

The volume of remortgage loans fell by 15% to 23,505.  This is a 21% decline from the 29,700 remortgage loans of October 2013.  It is the lowest volume of remortgage loans ever recorded for October.  Remortgage fell to 19% of the total lending market.  This is a 5% decline from last month and 24% lower than October 2013.

Andy Knee, chief executive of LMS, remarked, “Despite signs of resurgence in the market last month that remortgaging had taken a turn for the better, this month saw that assumption come crumbling down with the worst October we've experienced since during the midst of the recession.

“Even with the competitive rates on offer, customers appear hesitant to take advantage of these perhaps, in part, due to the increased regulation of MMR or the introduction of loan to income caps.

“Recent months have witnessed evidence of a wider cooling in the market as house price growth and loan approvals slow but it awaits to be seen whether this is a permanent trend, or simply a slowdown in the lead up to Christmas.”