LMS’ latest Remortgage Healthcheck Index has revealed that the the Remortgage Approvals indicator fell more moderately in Q2 compared to its sharpest decrease in 11 years during Q1, totalling 45.9.

The Borrowing Costs indicator fell by 30.1 to 40.0, the sharpest ever contraction in the Index’s history.

After reaching the highest possible reading in Q1, the Homeowner Equity indicator dipped slightly to 96.9 as house price growth began to slow in Q2.

Borrower sentiment slips for the fourth consecutive quarter but by just 0.1 point, to 57.1.

Nick Chadbourne (pictured), CEO at LMS, said: “The drop in the borrowing costs indicator shows that, perhaps unsurprisingly, the Bank of England base rate increases are the biggest factor currently impacting the market as lenders are having to consider passing on some higher costs to the customer, something which they have admirably staved off doing for as long as possible.

“With the ongoing cost of living crisis and impending recession, this trend is likely to continue, but the homeowner equity indicator remained in positive territory – though house price growth slowed marginally, it still acted as a buffer and, together with the rise in average approvals values, prevented the overall indicator score dropping more substantially.

“For borrowers, the focus should now be on locking in lower costs for longer, and it’s important for lenders and brokers to make sure such products are available and accessible, especially as £1bn worth of mortgage products are set to mature before year end and with ongoing upheaval markets could become more volatile.”