A reduction in the number of people looking to move home is putting the brakes on the property market, research has revealed.
Valuations from home sellers have fallen steadily from 45 per cent of the market in May 2010 to just 27 per cent in May 2017, according to Connells Survey & Valuation.
A shortage of homes on the market, an increase in stamp duty and the extended economic uncertainty are believed to have encouraged people to stay put.
Remortgaging is now supporting the mortgage market and this year rose to an all-time high for the month of May.
It now accounts for 23 per cent of all valuations – a 2 percentage point increase month-on-month and seven percentage points higher than the five-year average.
Conveyancing service provider LMS recently revealed remortgaging accounted for a third of total mortgage lending during April.
While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging.John BagshawJohn Bagshaw, corporate services director of Connells Survey & Valuation, said: “An increasing number of homeowners are choosing to improve rather than move.
“While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging.
“With homes worth more than they were five years ago and low interest rates on offer from lenders, many have taken the opportunity to refinance for a better deal.
“This should cut monthly repayments and provide some additional financial security to help homeowners get through any potential economic uncertainty ahead.”
John Phillips, group operations director at Colchester-based Just Mortgages and Spicerhaart, said: “As valuations for remortgages rise to 23 per cent of the market it is clear that remortgaging is continuing to lead the way.
"In fact, as mortgages to buy homes are falling, remortgages on existing homes are picking up some of the slack.
“However, this isn’t surprising as people continue to take advantage of record low mortgage rates and use this as an opportunity to pay off debts and unlock equity. I am therefore confident that remortgaging will continue to support the market throughout 2017.”
simon.allin@ft.com
