The LMS remortgage approval indicator hit its highest level since 2015 in Q3 2020.

Jumping 11.5 points from 59.4 to 70.9, LMS says that values continued to rise in the third quarter while approval numbers have “turned a corner”, although it points out that they still haven’t caught up to Q1’s numbers.

In additional good news, the homeowner equity score rose from zero (due to the housing market freezing) to 66.1, matching Q4 2019’s figure.

Meanwhile, the borrowing costs figure drooped by 3.6 points to 52.1 and borrower sentiment fell by 0.1 points to 54.6.

LMS says that regarding borrowing costs, lender spreads are at their highest level since Q3 2016 and so the average repayment rate is now higher than at the start of the year.

The proportion of LMS borrowers who increased their loan size fell for a second quarter in a row, it adds in relation to the latter drop in sentiment.

However, the overall remortgage health check flew up from 48.5 in Q2 this year to 60.2 in the third quarter – the first positive overall score for the first time in five years.

It says this is due to “enormous” improvement in the homeowner equity indicator and growth in remortgage approvals.

Scores between 40 and 60 are considered neutral, with scores either side of these negative and positive, respectively.

LMS chief executive Nick Chadbourne says: “We are optimistic for continued strong performance in Q4, though we should retain a note of caution given that lockdown measures have returned.

“Vitally, the housing market remains open for business, so any impact will hopefully be far smaller than the first time around. The focus is on home moving at the moment, taking up the majority of time across the industry, but this should tail off in 2021 and we should see a move back to remortgages and away from product transfers.

“Borrower sentiment has remained steady, and we hope to see borrowers retaining the same resilience that has kept the market buoyant since April.”