Remortgaging has hit its lowest level for five years, according to data from the Council of Mortgage Lenders.
Figures for September show remortgaging accounted for 30% of the market by value - the lowest figure since August 2001 and down from 42% in September last year.
In the third quarter of this year remortgaging accounted for just 31% of the market, compared to 39% in the third quarter of last year.
The CML suggests the sharp drop in the popularity of remortgaging reflects the fact lenders are managing to retain more customers for longer by reducing the incentive to remortgage to other lenders.
The number of people taking out fixed-rate deals has also shown a sharp fall. While fixed rates maintained a 59% share of the market in September, in the third quarter of this year they accounted for 60% of all loans, compared to 70% in the second quarter.
The CML says the fall in the take-up of fixed rates reflects their pricing becoming less attractive compared to variable rates.
The average interest rate on a fixed-rate mortgage reached 5.24% in September, up from 5.18% in August.
Meanwhile, the number of loans to first-time buyers fell to 31,100 in September, from 35,200 in August.
Michael Coogan, director general of the CML, says: "The downward trends in remortgaging illustrate how lenders are reacting to competitive conditions, and offering attractive retention products and policies to their customers. Today's figures show that slowly but surely the market is cooling as we approach the end of the year in an environment of higher interest rates."
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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