Remortgaging drives market activity
First-time buyer and remortgaging activity have both seen annual growth, at 13.1% and 24.6% respectively.
Recent research indicates that the mortgage market is being propelled by remortgaging activity, an area which is outperforming all others.
As people sought to remortgage, November saw a spike in market activity. In comparison with October, the valuations rose by 4.9% with an annual growth of 24.6%, according to the Connells Survey & Valuation figures.
On a seasonally adjusted basis however, November saw overall valuation figures drop marginally by 0.1% in comparison to October, rendering the activity as almost static. October saw a surge in remortgage valuations, with figures 16.8% higher than October in the previous year. Although not as dramatic, this November also saw an increase on last years’ numbers – a rise of 6.6%.
Commenting on these statistics was the Corporate Services Director of Connells Survey & Valuation, John Bagshaw: “There’s no doubt that remortgaging is driving the mortgage market at the moment. While the number of buy-to-let valuations is down almost nineteen per cent compared to November last year, remortgaging activity is up twenty five per cent. Homeowners want to lock into deals before rates rise.”
Buy-to-let (BTL) sector valuations dropped month-on-month by 6.1% and on an annual basis by 18.5%. This was after the Chancellor’s announcements in the Autumn Statement which included a ban on lettings fees.
Mr Bagshaw commented on how the year has impacted landlords and the possible resurfacing of uncertainty within the market, stating: “2016 has been something of an annus horribilis for landlords. They have had to contend with the reverberations of the 3% stamp duty surcharge and the removal of 10% ‘wear and tear’ allowance. Fortunately, June through to October were all relatively good months for BTL remortgages with activity rising on a seasonally adjusted basis. The sector was beginning to find its footing again. However, Phillip Hammond’s latest proposals regarding lettings fees appear to have unsettled the market again.”
For home movers, activity lulled as demand fell month on month by 0.8% for those already on the property ladder as well as those looking to move. For first-time buyers however, November saw a month on month growth of 1.8% for valuations and an annual rise of 13.1%.
Mr Bagshaw concluded by mentioning the resilience of the market indicated by the constancy of activity: “On an annual basis first-time buyers, home movers and those looking to remortgage are pretty active. The annual increase in activity in these sectors has demonstrated the current strength in the market and there has been no drastic change in activity on a monthly basis, as the market remains stable and will be adjusting to changes in the coming months.”