Remortgaging dominating housing market
Activity increased by 18% between January and February 2014, while since February last year the number of remortgage deals rose by 35%.
The total number of valuations grew by 21% month-on-month, bringing mortgage market activity to levels 27% ahead of February 2013.
John Bagshaw, corporate services director of Connells Survey and Valuation, said: “Remortgages are making up a large part of the market as people struggle to make budgets add up – they’re remortgaging to keep monthly payments down.
“As the likelihood of an impending interest rate hike increases, so will the number of homeowners looking to remortgage as they try to ensure they will still be able to pay the bills in the future.”
The number of valuations carried out on first-time buyer purchases increased by 13% month-on-month in February, more slowly than the rest of the housing market. However, first-time buyer valuations grew 22% compared February 2013.
The number of valuations carried out on behalf of established home movers accelerated by 32% on a month-on-month basis – the fastest of all market sectors.
Bagshaw added: “Even at this blistering pace, there is still a long way to go before the backlog of remortgagors, first time buyers, and homeowners who haven’t been able to move is finally cleared.
“First-time buyers have had a very bad run at it over the last five years. There’s a huge backlog of them wanting to get on the property ladder.
“A slight moderation in the pace of annual growth this month illustrates this is steady, sustainable growth – this is not a market spiralling out of control.”
The number of buy-to-let valuations increased by a third in February 2014 compared to the year before, while from January they rose by 25%.
Bagshaw concluded: “Raising a deposit still feels like a Sisyphean struggle for millions, and will remain so until wage rises and interest rates start to reward savers again.”