Market growth fueled by remortgaging
A new report from Connells Survey & Valuation has found that the recent ban on lettings fees has hit Novembers BTL valuations - causing a 6.1% drop against the previous month.
However, there was a surge of activity in people looking to remortgage in November with valuations rising 4.9% compared to October and a 24.6% increase on an annual basis.
The first-time buyer market also saw an increase of 1.8% month-on-month and 13.1% annually.
Connells also reported was a slight lull in activity in the home mover segment with demand falling 0.8% month on month.
On a seasonally adjusted basis, overall valuation activity was virtually static in November as the number of valuations fell marginally, down 0.1% on October. There was, however, a 6.6% increase in the number of valuations undertaken compared to November 2015.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “There’s no doubt that remortgaging is driving the mortgage market at the moment. While the number of buy-to-let valuations is down almost nineteen per cent compared to November last year, remortgaging activity is up twenty five per cent. Homeowners want to lock into deals before rates rise.
2016 has been something of an annus horribilis for landlords. They have had to contend with the reverberations of the 3% stamp duty surcharge and the removal of 10% 'wear and tear' allowance. Fortunately, June through to October were all relatively good months for BTL remortgages with activity rising on a seasonally adjusted basis. The sector was beginning to find its footing again. However Phillip Hammond’s latest proposals regarding lettings fees appear to have unsettled the market again.
On an annual basis first-time buyers, home movers and those looking to remortgage are pretty active. The annual increase in activity in these sectors has demonstrated the current strength in the market and there has been no drastic change in activity on a monthly basis, as the market remains stable and will be adjusting to changes in the coming months."