The Funding for Lending Scheme has seen the total number of residential valuations increase by 24 per cent since July of last year when the programme came into effect, according to chartered surveyors Connells Survey & Valuation.
The increase was fuelled by a 45 per cent growth in remortgaging activity in July compared to the year before, as existing homeowners took advantage of the improved mortgage deals available on the market.
Despite the annual rise, the total number of valuations was 30 per cent lower in July than June, in keeping with a typical seasonal drop-off in the market. But the annual figures demonstrate the long-term improvement in the housing market as valuations activity accelerates.
John Bagshaw, Corporate Services Director of Connells Survey & Valuation, comments: “Annual growth of almost one quarter puts the number of valuations last month at twice the level of July 2010. We’ve certainly come a long way.
“Over the summer Mark Carney and George Osborne might take a bit of time to contemplate the impact of Funding for Lending. It’s true that the wider economic benefits of the scheme are still uncertain. But here on the ground, the benefits are clear. We’re already navigating a radically different housing landscape to the one we saw last year. The rapidly improving availability of mortgages is helping to make housing more affordable, and despite a slow start, volumes are starting to follow suit too.”
Remortgaging activity experienced the fastest expansion of any section of the market. In July, valuations for remortgaging purposes increased by 45 per cent from last year, despite a seasonal fall of 26 per cent from the height of the early summer market in June. Remortgaging now represents a larger segment of the market, at over a quarter (27 per cent) of all valuations, compared to 23 per cent last July.
By stark contrast, home movers have seen the weakest growth of any sub-sector since the start of Funding for Lending. In the last twelve months, activity amongst those moving home grew by 9 per cent (excluding first-time buyers). Meanwhile, on a monthly basis, the number of valuations for home movers saw the sharpest seasonal fall. Home movers made up 30 per cent of all valuations in July, compared with 33 per cent a year earlier.
However, first-time buyers were more fortunate than established home movers. Activity on behalf of new buyers has grown 23 per cent compared to a year ago, despite a seasonal drop off by one third (33 per cent) in the month since June.
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