Graph to show gross mortgage lending vs gross remortgage lending - Sept 16*

Remortgaging had the worst month since the referendum in September, according to LMS, one of the UK’s leading conveyancing panel management specialists. The number of remortgages decreased in the last month, dropping by 12% from 34,900 in August to 30,766 in September. The value of gross remortgage lending also decreased from £5.9 billion in August to £5.1 billion in September by 14%.

Remortgaging accounted for just 25% of total gross lending in September – the lowest amount since March 2016 – when there was a surge in house purchase and buy-to-let activity before the change to Stamp Duty on second homes was introduced.

The dip in remortgaging activity comes at a time when the nation’s economic future appears unclear as the UK approaches the start of formal negotiations to leave the European Union.

The average loan amount rose by 1% from £162,263 in August to £164,394 in September. However, annually, the average loan amount increased by 7% from £154,360 in September 2015.

Average remortgage loan amount and LTV by region - Sept 16**

Average remortgage loan amounts differed in value across the country, from £111,380 in Yorkshire to £290,754 in London.

The average LTV also varied across the different regions of the country – from 58% in the South West to 91% in the North East. In six regions, the average LTV increased or remained the same, while four areas experienced a decrease.

The biggest rise in average LTV was seen in the North East, where it climbed from 77% in August to 91% in September.

The largest fall in average LTV was in the South West, East Anglia and Yorkshire, in each of these regions it fell by 3 percentage points.

NOTE: The methodology for calculating average LTV and loan amounts in regional areas has changed from May 2016 onwards and now incorporates the combined ‘House Price Index’, which replaces the previous House Price Indices separately published by ONS and Land Registry.

Term of redeeming mortgage by region (years) - Sept 16**

Wales and the West Midlands bucked the national trend – as average mortgage terms decreased in these regions. The average term fell from 4.74 years to 4.57 years in Wales, while it fell from 4.79 to 4.65 years in the West Midlands.

Graph to show repayments as % of income - Aug 16*

In the aftermath of the Bank of England’s decision to cut the Bank Rate to 0.25%, mortgage interest rates remained at a record low of 2.31% in August, according to the CML. Year-on-year, this represents a drop of 0.16 percentage points from August 2015, when interest rates were 2.57%.

Annual mortgage repayments dropped by £527 from £9,144 in July to £8,617 in August, while there was slight upward movement in the average household income, which climbed by £549 from £46,867 in July to £47,416 in August, accounting for improved affordability.

As a percentage of income, this represents a fall from 19.5% to 18.2%, a fall that has been influenced by rising wages and the decline in interest rates and standard variable rates across the board between July and August, according to Bank of England data.^

"The recent weeks and months have been tainted with uncertainty. Since the vote to leave the European Union there has been some doubt and ambiguity surrounding the future of the nation’s economy."

"This uncertainty appears to have spread to the remortgage market, with activity at its lowest level since the referendum. Gross remortgage lending and the share of remortgaging in the wider market have both fallen as homeowners put remortgaging plans on hold to wait and see how Theresa May’s government approach Brexit negotiations."

"The number of remortgages has also fallen as more homeowners remain on their current deals for the time being."

"However, it is not all doom and gloom. Annual repayments have fallen again and mortgage rates are at their lowest-ever level. For those homeowners willing to remortgage, there remains plenty of incentive to do so and many could still benefit by remortgaging onto deals with lower interest rates and repayments - 85% of remortgagors did exactly that in September^^. Reducing monthly payments is something that will be important for many as inflation increases and the price of everyday essentials rise."