Figures from the trade body revealed remortgaging fell to 30 per cent of the market by value in September, down 12 per cent on the same month last year, to its lowest level since August 2001.
Remortgaging for Q3 2006 also showed a sharp decline on the level seen a year ago, falling to 31 per cent of the market compared with 39 per cent last year.
Michael Coogan, director-general of the CML, commented: “The downward trends in remortgaging illustrate how lenders are reacting to competitive conditions, and offering attractive retention products and policies to their customers.”
However, industry figures believed other factors were also at work.
John Webster, chief executive officer at Swift, said: “We have not seen a reduction in remortgaging business as most of our clients are looking to rearrange debts. However, people seem to be taking out longer-term fixed rates so while the CML’s claim has validity, there is not so much rate-switching going on.”
Linda Will, managing director of Accord Mortgages, believed it was too early to tell if lenders’ policies were the catalyst.
“September is traditionally not a high remortgage month because Summer is quieter for completions. However, there’s no doubt from our experience that retention efforts are bearing fruit as the percentage of borrower transfers from intermediaries has gone up from 10-15 per cent overall to around 70 per cent. The end of November is when you start to see huge maturities of loans – that will be the one to watch as it will really show if lenders’ retention policies are having an impact.”
