Remortgaging activity in 2013 is the highest it has been for six years, according to chartered surveyors Connells Survey & Valuation.
In just the ten months to October, the number of remortgaging valuations arranged stands 9% ahead of the previous annual record, set in 2007.
In October itself, remortgaging also saw the fastest annual growth of all sections of the valuations market. October saw the number of remortgaging valuations up 55% since October 2012. This was despite a 26% monthly fall from September’s seasonal peak.
John Bagshaw, Corporate Services Director of Connells Survey & Valuation, comments: “Despite signs of economic growth, many in the UK are still coping with a fall in real wages. As a result, household finances are still feeling a serious strain, despite the renewed sense of economic optimism.
“So given the current record low interest rate, remortgaging can provide a real opportunity to boost the monthly sums. Even since a year ago, remortgaging interest rates have fallen, and the choice of deals on the market has dramatically improved.
“While economic growth will eventually feed into wages, there may be a long wait until this happens. So – for the time-being at least – lower mortgage payments will continue to provide a vital buffer for many households.”
A similar trend was reflected in buy-to-let activity, with 42% more valuations for potential landlords than a year ago. Again this was despite a seasonal fall of 25%.
Meanwhile, the valuations industry as a whole witnessed 39% annual growth in October, on the back of a strong performance in every sub-sector, and despite a 22% monthly fall.
John Bagshaw comments: “Buy-to-let activity has continued to gain ground over the last year. Alongside remortgaging, this has provided a welcome chance for lenders to balance their lending portfolios with more loans at lower loan-to-value ratios – and an extra boost for the valuations industry. Moreover, buy-to-let activity is still being driven by solid demand from landlords. With many people still priced out of buying property, we expect this area of activity to keep growing for the foreseeable future.”
First time buyers have also seen a sharp improvement since last October – requiring 37% more valuations than a year ago. Compared to this autumn’s seasonal peak, new buyer activity also fell by less than the entire market, down by 20% from September.
By contrast to remortgaging activity, valuations for homeowners looking to move saw the slowest annual growth – up 29% compared to October 2012. However, this section of the market experienced the smallest seasonal slowdown compared to September 2013 – falling just 18% on a monthly basis.
John Bagshaw concludes: “We’re seeing clear movement further up the property chain, and progress is accelerating. Ideal conditions for landlords and remortgagors, combined with a razor sharp focus from the government on first time buyers, means these areas have been leading the charge. However, that momentum is also proving fruitful for second steppers and beyond. As the general recovery continues, the ripples from the cutting edge should spread across the entire industry.”