Activity is slowing down this spring in the UK, as more and more home owners appear to choosing to improve their current home, rather than move to a new one.
The latest research from Connells Survey & Valuation shows that valuations from home sellers have fallen steadily from 45 per cent of the market in May 2010, down to just 27 per cent in May 2017 as homeowners lack incentives to move.
The mortgage market is currently being supported by remortgaging which now represents 23 per cent of all valuations – a 2 percentage point increase month-on-month and a record for May.
A shortage of homes on the market, Stamp Duty impacts at higher levels and the extended economic uncertainty have discouraged homeowners from moving on, says Connells.
John Bagshaw, corporate services director of Connells Survey & Valuation, explains: “An increasing number of homeowners are choosing to improve rather than move. While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging. With homes worth more than they were five years ago and low interest rates on offer from lenders, many have taken the opportunity to refinance for a better deal. This should cut monthly repayments and provide some additional financial security to help homeowners get through any potential economic uncertainty ahead.”
First-time buyers spark frenzy of activity in February
20th March 2017
First-time buyers sparked a frenzy of activity in the UK in February, making up more than one-third of the market.
First-time buyer activity jumped from 28 per cent in February 2016 to 36 per cent, according to Connells Survey & Valuation, taking advantage of low mortgage rates and the Bank of England’s near zero base rate to get on the housing ladder while they can. Indeed, this was the highest proportion of first-time buyers recorded by the valuation firm since July 2011 and the highest proportion in a February since 2010.
John Bagshaw, corporate services director of Connells Survey & Valuation, says: “Continued affordable mortgages have provided first-time buyers with an ideal opportunity to take their first step onto the ladder in February. Lending to aspiring homeowners continues to rise, while the base rate remains so low. For those with enough savings for a deposit, now is a great time to buy. Many are taking advantage of the opportunities on offer.”
In contrast to the resurgent market for first-time buyers, the buy-to-let purchase market fell to a new low in February, with buy-to-let purchases almost halved in February compared to the previous year, although this is partly due to the surge in activity last year ahead of April’s stamp duty surcharge introduction.
With supply of housing both in and out of the private rented sector far below demand, though, tenants will soon find themselves facing higher rents, which will impact their ability to save for a deposit.
“The problem will be exacerbated next month as mortgage tax relief is removed, forcing more landlords to exit the market or ramp up rents,” warns Bagshaw.
“In the Housing white paper, the Government announced plans to boost build-to-rent and institutional landlords, but it will be years before anyone can move into the accompanying new homes. Rents remained relatively stable following the influx of investment before the stamp duty surcharge but tenants could soon feel the full force of recently announced Government policies.”
UK housing activity jumps as consumer confidence climbs
18th January 2017
UK housing activity jumped at the end of 2016, as consumer confidence climbed.
Overall valuation activity reported by Connells Survey & Valuation was 40 per cent higher in December 2016 than the same month in 2014 and 8 per cent higher than the same month in 2015.
First time buyers led the field with the number of valuations rising by 26 per cent on an annual basis.
“First time buyers and people selling property have regained much of the confidence they lost in the wake of the Brexit vote. With interest rates still at record lows, many buyers are taking the opportunity to buy property that would have been regarded as a bargain at that price just a couple of years ago,” says John Bagshaw, Corporate Services Director of Connells.
Valuation activity among those looking to remortgage increased by 19 per cent.
“In August the base rate was cut to 0.25 per cent, the first adjustment in over seven years. This led to lower mortgage rates which has fueled the remortgaging sector. First-time buyers have also taken full advantage of government led schemes and incentives such as Help to Buy which have done a great deal for affordability,” adds Bagshaw.
The number of valuations conducted for those selling property increased 25 per cent between December 2015 and December 2016. Indeed, while overall activity is up 40 per cent, the volume of property sellers is up 32 per cent.
“The housing market has been recovering since September and had a great December,” concludes Bagshaw. “Compared to 2015 it looks good. Compared to December 2014 it looks exceptional.”
Brexit to offer boost for first-time buyers?
10th August 2016
The UK’s vote to the European Union may give a boost to first-time buyers attempting to get on the housing ladder.
Housing market activity shifted in favour of both first-time buyers and remortgagors, according to the latest research from Connells Survey and Valuation.
The first full month after Britain’s historic vote to leave the EU, July saw the number of all property valuations fall 2 per cent year-on-year.
John Bagshaw, corporate services director of Connells Survey & Valuation, comments: “Judging the Brexit effect might take years – but in the meantime the first full month after the vote already looks encouraging. Change has mainly been confined to the mixture of activity, rather than the overall volume of valuations. Any clouds of uncertainty are showing their silver lining for first-time buyers, if anything dealt an advantage as some other buyers paused for thought in the weeks immediately after the result. If longer-term economic issues are on the horizon, first time buyers aren’t feeling the effects yet.”
Activity in the first-time buyer and remortgaging sectors drove July’s valuation market. There were 12 per cent more first-time buyer valuations in July 2016 than in July 2015. (Remortgaging activity also saw the same annual rate of growth.)
Bagshaw continues: “First-time buyers are continuing to make the most of government schemes and are now boosted by even lower mortgage rates this summer. This is the same development that is proving a boost for remortgagors, also benefitting from a new wave of even better mortgage deals.”
The figures are backed up by new data from the Council of Mortgage Lenders, which found that first-time buyers borrowed £5.5bn in June 2016, up 28 per cent on May and 25 per cent on June last year. This equated to 34,300 loans, up 24 per cent month-on-month and 17 per cent year-on-year.
Richard Connolly, Chief Executive Officer at Rentplus, comments: “It’s reassuring to see an increase in first-time buyers in June, confirming that more young Britons are realising their dream of homeownership. However, homes unfortunately still remain unaffordable for many, with house prices rising faster than wages during the year. First-time buyers are therefore having to increase their borrowing even further, just to get a foothold on the property ladder. Despite low interest rates and other incentives, homeownership remains out of reach for many; with rents continuing to rise, this further hinders progress on savings for a deposit.”
“With the changing economic climate after the EU referendum, the challenge of increasing homeownership may now steepen,” he adds. “While low interest rates may make obtaining mortgages more affordable, there could further hurdles such as potential slowdowns in employment or construction making it more difficult to buy a home. To give first-time buyers a boost, the government needs to implement a range of mixed tenure options to help improve access to housing.”Google+