MortgagesNov 18 2015

Remortgaging rockets in October

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Remortgaging rockets in October

Last month’s total number of remortgage valuations was 53 per cent higher than in October 2014, according to Connells Survey & Valuation.

The figures come despite the seasonal fall, which saw activity from remortgaging in October drop 21 per cent from September.

John Bagshaw, corporate services director at Connells, said those looking for cheaper rates have likely been tempted to remortgage to take advantage of the “rock-bottom” interest rates while they last.

Many are also taking this opportunity to remortgage in order to release equity and so upgrade their current property, he noted.

Despite home mover valuation activity falling 27 per cent between September and October this year, growth on a 12-month basis remains solid, according to the firm.

The sector registered 14 per cent growth in October this year, compared with the 2014 figure.

Valuation activity for all purposes remains strong, climbing 28 per cent year-on-year, despite dropping back by 21 per cent compared to last month.

Mr Bagshaw said that home movers – traditionally the bedrock of the housing market – have experienced more steady activity in October compared to previous months. “But with home values continuing to rise solidly and mortgage rates remaining low, this seems like more of a seasonal blip than the start of a trend.”

Both the buy-to-let and first-time buyer sectors recorded strong year-on-year activity in October, according to Connells.

Valuations carried out for buy-to-let investors increased by a quarter year-on-year, while first-time buyer valuations increased by a fifth over the same period.

However, both sectors experienced a slight monthly downturn, with October activity in the buy-to-let sector down by 9 per cent on September, while first-time buyer activity saw a 17 per cent dip over the same period.

“The buy-to-let sector continues to thrive, albeit it at a steadier pace than in previous months,” commented Mr Bagshaw, adding that the fundamentals of its profitability have remained intact.

“First-time buyers have also enjoyed a long stretch of growth, aided by schemes such as Help-to-Buy and increasingly buoyed by the good economic news, they are becoming more willing to take the risk and get on the housing ladder.

“Nevertheless, remortgagers remain the big drivers of activity this month – as people opt in large numbers to improve rather than move.”