Remortgage sector thrives despite Brexit

Posted on Friday, July 15 by Joy Tibbs

Despite the UK’s shock decision to leave the EU, valuation levels remain “surprisingly stable”, according to Connells Survey and Valuation. Connells recorded a 4% year-on-year increase in the number of valuations it carried out.

John Bagshaw, corporate services director at Connells Survey and Valuation, said: “These figures for June capture Britain’s property market in the run-up to the EU referendum, but also include a glimpse of the final week of last month.

“So the background here is a collage of both uncertainty and shock. Yet the property landscape appears surprisingly stable; even framed by such drama. This is encouraging.

“Initial solidity from the post-Brexit housing market may not be enough to answer all the new legal and financial questions in light of the vote, or to offset a likely blow to confidence on the near horizon. But this should bring such fears into perspective. Life will go on and the property market will continue to function.”

First-time buyer activity increased during June, making up for a considerable decrease in buy-to-let valuations. Those taking their first step onto the property ladder increased by 23% year-on-year, while buy-to-let valuations fell by 40%.

Mr Bagshaw said: “First-time buyers continue to drive activity in the housing market, an emerging trend since the start of the year, and now reaching a new peak.

“Government schemes such as Help to Buy continue to be significant. But now a slowdown in the buy-to-let sector may be adding an extra short-term boost for new buyers, as competition from landlords diminishes a little, easing the hunt for a home for sale.”

Remortgage activity increased significantly in June. The number of remortgage valuations increase by 18% year-on-year and 19% month-on-month.

Valuations for existing homeowners moving to a new property decreased by 7% year-on-year but increased by 29% month-on-month.

Mr Bagshaw added: “Home movers have once again had a stable month, and this section of the market has enjoyed the strongest seasonal acceleration from May.

“Meanwhile, remortgaging is the other major winner from a time of consistently low mortgage rates and a possibility of even lower borrowing costs over the summer. As seen in recent months, many people are taking advantage of these rates and switching to better mortgage deals.

“While the coming months are far from certain, so long as lenders remain financially healthy there’s a good chance that expected lower interest rates could feed through to even better mortgage rates and a further wave of remortgaging activity.”

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