UK mortgage lenders are “strategically” focusing on remortgages to “quickly regain market share” in 2024, according to some brokers.
Alexander Southwell Mortgage Services mortgage director, Jamie Alexander, explained focusing on remortgages "allows for quick turnarounds, sidestepping potential delays common in purchase cases".
These comments come after major lenders, such as HSBC and Santander, recently announced rate reductions across their mortgage range which gave the cheapest rates for remortgages rather than purchases.
This trend was also noticed by Abbeydale Mortgages director, Richard Thompson, who reported that, currently, there is a “notable emphasis” on remortgages by lenders.
This is given the “awareness” that a “substantial” number of mortgages from the first quarter will reach the end of their fixed-rate periods soon.
“Many mortgage customers seem to have adopted a wait-and-see approach regarding interest rates,” he said.
Staton Mortgages director, Mike Staton, added: “It’s clear to me that lenders can see a booming remortgage market and who can deny it."
However, Davidson Deem director of mortgages, Peter Stokes, pointed out this represented “fairly normal practice” for this time of year.
“Home movers either got their applications in well before Christmas to try and be in for the festive period, or they tend to postpone moving until Spring,” he explained.
But, Self Employed Mortgage Hub founder, Graham Cox, cautioned this trend may not continue into the long term.
“Lenders probably want to get some quick business in, and remortgages are low-hanging fruit. I don’t see this trend continuing,” he explained.
Cox predicted, by the Spring, purchases and remortgage pricing will be at parity.
Past impact
Additionally, Model Financial Solutions director, Hannah Bashford, added that it’s “no surprise” the housing market has been “relatively depressed” for the past 12 months.
“Although lenders have been prioritising purchases and repricing to attract that type of borrower it seems they are now keen to tap into the 1.6mn remortgages that are due in 2024.”
She described this as a “smart move” from those lenders as it prioritises existing borrowers who may be a safe bet and an easy win to get business on the books.
“I wouldn’t be surprised to see competitive remortgage pricing this year.”
tom.dunstan@ft.com
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