Remortgage surge relieves traditional April slowdown

A surging remortgaging sector has mitigated the 'historic steadying' that occurs in the month of April, according to Connells Survey & Valuation.

Related topics:  Mortgages
Rozi Jones
6th May 2016
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Connells added that remortgaging has "driven the UK housing market to make great strides forward on a long-term basis".
 
The total number of valuations carried out in April rose 24% year-on-year, compared to the 22% short-term downturn that occurred in the market as a whole between March and April.
 
Every year since 2013, April has seen a decline in valuation volumes on a monthly basis. Between March and April 2015, overall valuation activity declined by 32% – ten percentage points greater than the fall experienced over the same period in 2016.

John Bagshaw, corporate services director of Connells Survey & Valuation, commented:

“April’s property market is experiencing some vibrant long-term growth, regardless of any short-term indicators. The monthly downturn the valuation sector has experienced overall is a reflection of an historic trend which sees housing activity typically sink somewhat after a New Year surge. However, this year’s dip has not been as protracted as that of previous years’ – a sign the property market is becoming robust enough to endure these cyclical market forces.
 
“The longer-term picture is even more positive. As house prices continue to rise and interest rates remain at record lows, ever more people will be drawn to the property ladder.”

The remortgaging sector saw the strongest annual uplift, growing by half (50%) between April 2015 and April 2016, while valuations carried out for first-time buyers grew by 46% on a yearly basis.
 
Valuation activity for home movers remained steady in April. The buy-to-let sector was the worst-performing area of the property market, as April marked the first month of the Government’s new 3% Stamp Duty hike on second homes. Valuation activity on both a monthly and yearly basis fell by 41% in April.

John Bagshaw concluded:

“Home movers have had a more stable month than many other parts of the property market. The trend is nothing out-of-the-ordinary for this time of year. In fact, the sector is performing at a somewhat above-average rate, given the seasonal dip it usually experiences.
 
“Meanwhile, the buy-to-let market has endured a significant blip in April. But this is hardly a surprise. With April marking the first month of the Stamp Duty levy, many investors were always going to hold off until they could see how the new charge worked in practice. Expect activity in this sector to gradually pick up again over the coming months, as landlords gradually learn to account for the SDLT in their financial planning. Nevertheless, despite a buy-to-let slide, April’s housing market has revealed its underlying strength and appeal in the face of some adverse seasonal conditions.”

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