Increased remortgage activity boosts August
The total number of residential property valuations conducted in August was 6% higher than twelve months ago, according to the latest research by Connells Survey and Valuation.
Despite a seasonal month-on-month dip of 5% in August, caused largely by the impact of summer holidays, the total number of valuations conducted has risen by 17% compared to August 2008.
In August remortgaging activity showed the most significant improvement, rising by 6% compared to July. This represented an increase of 64% compared to last August – albeit from a low base.
Ross Bowen, the managing director of Connells Survey and Valuation, commented: “While we are still seeing much smaller volumes than two years ago, it is good to see that remortgaging activity is on the up.
“After nearly 18 months of enjoying the benefits of record low interest rates, we are starting to see an upturn in homeowners remortgaging onto fixed rates. With inflation well above the MPC’s 2% target, potential interest rate hikes are likely to prompt more homeowners to remortgage.”
The annual increase has also been driven by the increasing number of homeowners looking to move (+2%), and first-time buyers on the market (+1%) compared to August 2009.
The number of valuations for buy-to-let dropped by 16% compared to the year before.
However, there were signs that the recent supply and demand imbalance in the market was easing, with valuations for first-time buyers up by 5% compared to July.
Ross Bowen concluded: “Restrictive credit conditions are still frustrating many would-be buyers, but there are signs that lending has loosened slightly – helping more first-time buyers to enter the market than last year.
“An increased supply in properties in recent months has also given buyers an incentive – increasing the range of properties to choose from, while preventing house prices from rising beyond their reach.
“We’ve come a long way in the last year, and the housing market is in a far healthier situation than a year ago. But the economic outlook suggests there will still be choppy waters ahead.
“Public sector spending cuts are on the way, and the subsequent rise in unemployment, and impact on house finances may have a dampening effect on market activity, and consumer confidence in the medium-term.”