UK remortgaging activity has increased dramatically over the past 12 months, according to latest research from Connells Survey & Valuation.
In October, the total number of remortgage valuations carried out was 53% higher than in October 2014. The figures come despite the seasonal fall, which saw activity from remortgaging in October drop 21% on September 2015.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Remortgaging is roaring ahead this month. Those looking for cheaper rates have likely been tempted to remortgage to take advantage of the rock-bottom interest rates while they last. Many are also taking this opportunity to remortgage in order to release equity and so upgrade their current property.
“That said, it’s still a great time to move house. Home sales continue to climb and the Government is improving the liquidity in the housing market by kick-starting the construction of starter and mid-range homes. In addition, low interest rates are not just a remortgagors dream – they also make it easier for home movers to climb the property ladder.”
Despite home mover valuation activity falling 27% between September and October of this year, growth on a 12-month basis remains solid. The sector registered 14% growth in October 2015, when compared to October of last year.
Valuation activity for all purposes remains strong, climbing 28% between October 2014 and October 2015, despite dropping back by 21% compared to last month.
Bashaw explained: “Home movers – traditionally the bedrock of the housing market – have experienced more steady activity in October compared to previous months. But with home values continuing to rise solidly and mortgage rates remaining low, this seems like more of a seasonal blip than the start of a trend. By most measures, it’s still a great time to buy.
“The housing market’s forward indicators remain strong. Activity in all sectors is up on last year – a reflection of a positive combination of economic growth, rising consumer confidence and increasing real-terms wages.”
Both the buy-to-let and first-time buyer sectors recorded strong year-on-year activity in October. Valuations carried out for buy-to-let investors grew by 25% between October of this year and October 2014, while first-time buyer valuations increased by 20% over the same period.
However, both sectors also experienced a slight monthly downturn, with October activity in the buy-to-let sector down by 9% on September. Meanwhile, first-time buyer activity saw a 17% dip over the same period.
Bagshaw added: “The buy-to-let sector continues to thrive, albeit it at a steadier pace than in previous months. The fundamentals of its profitability have remained intact. Demand for housing still exceeds supply and very low mortgage rates remain in abundance. Moreover, the Bank of England announced recently that any rate rise is off the cards for the immediate future, meaning the field is still open for many more investors to acquire a portfolio and become a new landlord.
“First-time buyers have also enjoyed a long stretch of growth. Aided by schemes such as Help-to-Buy and increasingly buoyed by the good economic news, they are becoming more willing to take the risk and get on the housing ladder. Nevertheless, remortgagers remain the big drivers of activity this month – as people opt in large numbers to improve rather than move.”