Remortgaging in the UK outperforms rest of housing market, report suggests

Over the last 12 months, the number of valuations for remortgaging purposes has grown faster than any other part of the housing market, according to the latest monthly report from chartered surveyors Connells Survey & Valuation.

The firm reveals that remortgaging activity increased 18% between January and February.  The number of remortgage deals has increased 35% since February 2013.
 
According to John Bagshaw, the firm’s corporate services director, 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 home owners looking to remortgage as they try to ensure they will still be able to pay the bills in the future,’ he said.
 
The report also shows that the total number of valuations for all purposes has grown by 21% month on month, bringing mortgage market activity to levels 27% ahead of February 2013 and Bagshaw expects double digit growth to be the norm for some time, as the property industry continues to thrive throughout 2014.

He pointed out that even at this blistering pace, there is still a long way to go before the backlog of remortgagors, first time buyers, and home owners who haven’t been able to move is finally cleared.
 
While seeing substantial growth, the number of valuations carried out on first time buyer purchases increased more slowly than the rest of the housing market in February, growing 13% month on month. However, first time buyer valuations grew 22% compared to the same month in 2013.
 
The number of buy to let valuations increased faster than most other areas of the market in February, reaching levels 33% ahead of February 2013, and 25% ahead of January this year.
 
‘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, not a market spiralling out of control,’ said Bagshaw.

‘The surge in buy to let activity reflects the difficulties still facing many potential new buyers, and the associated strength of demand for rental properties. 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,’ he added.
 
In contrast, 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 believes this is because people who, until a few months ago, might have been put off by the economic climate have started to think more seriously about moving.

‘For most of the UK, the spectre of negative equity has receded, and in many parts, not just the South East, there is a palpable sense of optimism,’ he added.