Remortgaging was the fastest moving element of the housing market in the year to February, according to chartered surveyors Connells Survey and Valuation.
The study found that the number of remortgage deals has increased 35 per cent since February 2013 and was up 18 per cent in February, compared to January.
John Bagshaw, corporate services director of Connells Survey & Valuation, comments: “We are expecting further good news on the economy when official forecasts from the OBR (Office for Budget Responsibility) are released later this week.
“At the same time, the Chancellor will want to make plenty of political capital out of any other improvements he can announce on Wednesday afternoon. But as more good news rolls in, expectations about the likely timing of an interest rate hike may change, too. It’s likely that forecasts will start to predict an earlier rise, which will increase the cost of mortgages.
“Household budgets are still recovering from the last half decade of wage freezes and economic stagnation. Remortgages are making up a large part of the market as people struggle to make budgets add up – they’re remortgaging to keep monthly payments down. As the likelihood of an impending interest rate hike increases, so will the number of homeowners looking to remortgage as they try to ensure they will still be able to pay the bills in the future.”
The total number of valuations for all purposes has grown by 21 per cent month-on-month, bringing mortgage market activity to levels 27 per cent ahead of February 2013.
Bagshaw continues, “We expect double-digit growth to be the norm for some time, as the property industry continues to thrive throughout 2014. But, even at this blistering pace, there is still a long way to go before the backlog of remortgagers, first time buyers, and homeowners who haven’t been able to move is finally cleared.”
While seeing substantial growth, the number of valuations carried out on first time buyer purchases increased more slowly than the rest of the housing market in February, growing 13 per cent month-on-month. However, first time buyer valuations grew 22 per cent compared to the same month in 2013.
The number of buy-to-let valuations increased faster than most other areas of the market in February, reaching levels one third (33 per cent) ahead of February 2013, and one quarter (25 per cent) ahead of January this year.
In contrast, the number of valuations carried out on behalf of established home movers accelerated by 32 per cent on a month-on-month basis – the fastest of all market sectors.
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