Remortgaging activity increases

The latest John Charcol monthly index revealed that the market share taken by remortgages including product transfers increased for the third month running and stood at 51.1% in February.

Purchases took only 47.3% of mortgages sold by John Charcol in February, down from a peak of 58.5% in November, which was the lowest market share taken by purchases since April 2010 and provides evidence that activity in the remortgage market has bottomed out.

The firm said that over half of the increase in remortgage activity over the last two months was due to a particularly sharp increase in buy-to-let remortgages.

Ray Boulger, senior technical manager at John Charcol, said the decline in remortgage activity has hot a bottom.

He added: "There is more competition and a modest reduction in some funding costs for lenders resulting in lower rates for both new fixed and tracker mortgages and the bounce in property prices since the low nadir early last year, increasing some borrowers' equity sufficiently to make remortgaging worthwhile."

The research also showed that variable rates mortgages accounted for 80.6% of loans arranged in February, the third consecutive month that variable rates havehad approximately 80% of business.