Housing market activity has shifted in favour of first-time buyers and remortgagers in the first full month after the vote to leave the EU, new research shows.
According to Connells Survey and Valuation, there were 12% more first-time buyer valuations in July 2016 than the previous year. Remortgaging activity also saw a 12% annual rate of growth.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “July was particularly good for those making their first step on the property ladder. Despite some widespread fears about Brexit, any negative impact on wages, employment or inflation has not materialised – and first-time buyers ready for the move are making the leap into homeownership.
“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 overall number of all property valuations fell 2% in July compared to the same month last year, reflecting a slight cooling compared to June.
Bagshaw said: “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.
“It’s not just silver linings. In fact the initial post-Brexit clouds are already blowing over. This is a time of change, so short-term eddies shouldn’t be taken as a set direction of travel. It won’t be until the coming months and years that real trends will start to emerge for the post-Brexit property reality. But in the meantime, people will still need properties, and the housing market is proving resilient.”
Those already on the property ladder looking to move home appear to have been slightly more cautious in July than those making their first step. Compared to the same month in 2015, home mover valuations have fallen in number by 8%.
Similarly, buy-to-let activity has been relatively cooler in July than at the same point a year ago. The total number of valuations for buy-to-let purchases has now fallen by 41% since July 2015.
Bagshaw concluded: “Buy-to-let activity is steady post-Brexit vote, even if at a level lower than last year. In fact this correction is not new, and mainly not as a result of referendum uncertainty.
“Since April, held back by the government’s 3% stamp duty surcharge, some landlords are pausing for thought. Looking ahead, tax changes are increasingly factored in to landlords’ investment plans which forms a strong core of buy-to-let activity focused on the long-term and a solid basis of future growth in demand for valuations from landlords.”
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