Remortgage sales in the last quarter of 2021 reached the highest level of activity since before the outbreak of the pandemic, according to the latest data from the Financial Conduct Authority (FCA).

The data showed that in Q4 2020 there were 92,558 remortgage sales, which outnumbered all other types of home loans for the first time since Q3 2020.

Meanwhile, sales of mortgages for first-time buyers hit 112,005 while house mover mortgages totalled 133,890.

Both first-time buyer and house mover mortgages reached a five-year peak in Q2 2021 but slumped in Q4 to 89,542 and 75,726 respectively.

With a higher-rate environment and slowing property market, Freedom Finance chief commercial officer Andrew Fisher says these will drive further remortgage growth in 2022, while debt consolidation could also contribute to activity in the remortgage and second charge markets.

Fisher says: “Since late-2020 mortgage sales for first-time buyers and home-movers rocketed due to pent-up demand from the first lockdown combined with stamp duty cuts, the ability for many households to save more money and a change in working habits driving a race for space.”

He explains that the latest data indicates that the housing market started to return to pre-pandemic trends in the final quarter of 2021 with remortgage sales outnumbering all other types of home loan. 

“The gloomy economic environment and the consecutive rate rises from the Bank of England are only likely to drive further demand in the remortgage market as borrowers look to lock in to fixed-rate loans either from variable rate mortgages or as their existing deals come to a close.”

The second charge mortgage market is also seeing rapid growth this year, with the value of new business reaching £127m in April 2022, marking a 54% increase compared to the year prior. 

Fisher suggests that as the cost of borrowing rises, squeezing household budgets even further, debt consolidation is rising up the agenda. 

“Second charge mortgages and remortgaging could therefore be an increasingly favourable method of clearing or reducing existing debts for homeowners looking to capitalise on the house price boom from the pandemic and get through the cost-of-living crisis,” he adds.