Figures are also down 15% from last year making it the smallest total value since March 2013 providing further evidence of a cooling mortgage market across the UK.
LMS also estimates that the number of remortgage loans fell by 19% to 21,396 in May. This figure is also down by more than a quarter (27%) from this time last year, when there were 29,300 remortgage loans recorded.
The average remortgage loan amount has also dropped to £155,448 (a 3% drop from last month) and the first dropped witnessed since October last year. However, this figure remains 7% higher than May 2013.
The remortgage market share now equates to 20% of the total market, a drop from 24% last month and down from 26% in May last year.
Andy Knee, chief executive of LMS, said: “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.
“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.”