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LMS tracker shows remortgage market is open for business

Nia Williams

April 8, 2020

LMS has published the first of its weekly updates tracking the remortgage market performance through the COVID-19 crisis, announcing that it is fully open for business.

Seasonally, the months of March and April are historically the busiest in the year, with a significant percentage of ERCs completing throughout this period. However, despite a reduction in interest rates, the COVID-19 crisis has given rise to a number of challenges through tighter lending criteria, consumer income reduction and unemployment.

Over time, LMS said it expects restrictive criteria to loosen as lenders start to understand the risks and opportunities around AVMs, with desktop valuations for more complex work and deals becoming available in the future.

Whilst instructions in April remain 20% behind seasonal expectations, the levels have remained steady since lockdown measures were announced in the middle of March – illustrating that the market has readjusted, preventing a continued downward trend.

Remortgage completions dropped in the second half of March, but LMS said the initial signs from its April data are very positive. Volumes are 30% up month on month and are ahead of 2019 activity.

Looking forward, LMS data shows some slowing of pipeline activity due to processing challenges such as access to redemptions statements, and the extension of funds request timelines by lenders to allow everyone to manage capacity.

However, it says that current activity is reassuring and even though process issues need to be ironed out, the industry as whole is finding solutions to handle cases and keep the market going, adapting to the new enforced working arrangements.

Nick Chadbourne, CEO of LMS, said: “Despite the stepped drop in the middle of March, we are seeing healthy volumes entering the pipeline and existing remortgage business is continuing to be processed as usual.

“We can also cautiously predict a strong April, thanks to a peak in ERC expiries and a strong pipeline compared with the previous month.

“The remortgage sector remains fully open for business, and as it refines processes and adapts to this new situation, capacity will only increase.

“We’re in uncharted waters to some extent, but knowing how the market is performing in real time could make a big difference for firms attempting to navigate their way through the crisis. As such, we’ll be sharing information on as many useful data points as we can.”


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