Are we on the brink of a remortgage surge?

 

New research from the Nottingham Building Society has found that brokers are forecasting an increase in remortgaging over the next 12 months as their clients aim to cut costs following rate reductions.

Its study found 58% of brokers expect a rise in remortgaging inquiries with nearly one in 10 (9%) forecasting a dramatic increase.

The research from the society, which offers a mortgage service that searches the whole of the market to find the best deal for customers, found that brokers are forecasting a rise in the number of five and 10-year fixed deals available. Around 48% of brokers believe there will be more five-year deals while 40% are forecasting an increase in 10-year deals.

However brokers are reporting a rise in customers giving up on remortgage and mortgage deals because the process has become more time-consuming and difficult – more than two out of five (41%) say they’ve seen an increase in customers giving up.

Brokers’ confidence on remortgaging is supported by consumer research which shows that 16% of homeowners are considering switching between March and August this year. The biggest group of homeowners contemplating this are those aged 25-34, many of whom may be in their first home and want to move on to better deals.

However, 19% of homeowners aged 45-54 and 9% of those in the 55-64 category, are also thinking of doing this, but The Nottingham’s research suggests that many people aged 40 and over have struggled to secure new deals.

Ian Gibbons, Nottingham Mortgage Services Senior Mortgage Broking Manager, said: “Brokers believe remortgaging could be a major growth area in the coming year and that is reflected in the new deals being launched by lenders.

However there remains an issue about customers giving up on applications because the process has changed since they last took out a home loan which underlines the need for the expert support provided by brokers and the whole of market service.”