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It is common, broadly for the reasons you describe - there's a risk that a cohabitee can obtain an equitable interest in the property by living there and contributing to costs.
andyfallsoff-
They could, but that beneficial interest wouldn't take priority over a prior legal charge in favour of the lender. The bank might have a genuine interest in having any co-occupiers disclaim any equitable rights on a remortgage but once the legal charge is in place the lender's position is safe.
I suppose the lender might just be being ultra-cautious.
Brommers
I guess the bank would want something in writing saying the person won't exercise rights gained through living there. Just wondered if anyone else had done it really, assumed it was common.