There was a sharp rise in remortgaging activity last month as homeowners, including property investors, seek ways to reduce outgoings, new figures show.

According to the latest research from Connells Survey & Valuation, remortgaging activity increased to just over a fifth – 21% – of the valuations market in March, up from 15% in the corresponding month last year.

With inflation at a near four-year high, it has been suggested that more homeowners view the option of remortgaging as a viable way to off-set the rising cost of living.

The growth in remortgaging has been supported by cheap borrowing rates, which have presented people with an opportunity to slash their monthly mortgage repayments.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Remortgaging rallied in March. As the cost of living rose, consumers started to hunt ways to reduce outgoings. Food prices have been increasing at their fastest pace in three years while fuel prices have jumped 18% annually. Faced with a spike in bills, homeowners have been forced to become more frugal.

“For those struggling, remortgaging can offer tangible financial relief. With the low-base rate and property values increasing 6.2% annually, many are seizing the opportunity to save through remortgaging at a lower loan-to-value ratio.”

The latest trend identified by Connells Survey & Valuation is supported by recent figures from the Council of Mortgage Lenders which show a 22% rise in the value of remortgage activity.

As a proportion of market activity, remortgaging hit its highest level in March for five years, but if the cost of living continues to rise and household bills balloon, Bagshaw expects to see an ever greater number of homeowners turn to remortgaging in order to cut costs.

Buy-to-let remortgage valuations have also seen a marginal rise, with many landlords viewing remortgaging as a good way to recoup the loss of mortgage tax relief, according to Bagshaw.

He continued: “With market rents not yet rising, one of the few alternatives [for buy-to-let landlords] has been to remortgage. More landlords have taken this path in March, given the lower cost of borrowing and higher property values.”                                                                                    

Connells Survey & Valuation also observed a slight slowdown in the first-time buyer segment, with March seeing activity return to the five year average.

Bagshaw added: “After the exceptional increases seen January and February, the market appears to be returning to equilibrium and the winter upswing in first-time buyers now looks to have been a short-term bounce.

“Rising inflation will have hit aspiring homeowners particularly hard. Many are finding it difficult to tuck away spare income and save for a deposit.”