June sees remortgages rise
Recent research has indicated that during June, a third of property valuations came from homeowners or landlords remortgaging.
The report by Connells Survey & Valuation indicated that the rise in valuations for remortgages is 7% higher than June’s five-year average.
In relation to market activity in general, buy-to-let remortaging made up 10% of loans taken out, whilst standard remortgaging accounted for 23% of activity last month. Cumulatively, these types of remortgaging made up a greater proportion of activity in the mortgage market than that of buy-to-let, movers or first-time buyers.
June also saw a drop in first-time buyer valuations, with the figure falling to 31%; whilst this is in line with the five-year average, it is 3% below the figure reached in June last year.
Commenting on the report was John Bagshaw. The corporate services director of Connells Survey & Valuation highlighted the prominence of remortgaging within the market, with buyers being attracted by favourable market conditions.
“Remortgaging is now taking a leading role in the mortgage market. Low interest rates on offer are attracting owner-occupiers and landlords eager to offset rising costs. This has led to remortgage activity more than doubling since 2009 as a percentage of the market, with a base rate close to zero for a decade.
“While it now appears unlikely that the Bank of England will raise the base rate in August, the economy remains turbulent. Many owner-occupiers are finding they have less disposable income, so the ability to cut their monthly repayments is proving enticing. The political uncertainty from Brexit and the hung parliament are encouraging consumers to refinance to ensure they are better prepared, should the economy slow down later in the year.
Contrasting to the remortgage market, we went on to highlight the decline in the first-time buyer activity during June, stating:
“There has been a slowdown in the first-time buyer segment in June. Rising rents, coupled with limited wage growth may have meant it’s been potentially harder for aspiring homeowners to save for a deposit. While the remortgage market goes from strength to strength, more needs to be done to help first-time buyers get a foot on the ladder.”