Growth in mortgage market slows down
New report also shows the number of buy-to-let investors is continuing to rise
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Your support makes all the difference.The mortgage market is growing at its slowest annual rate in two years, according to new figures from Connells.
Although the total number of residential valuations during June rose by 16%, on a year-on-year basis this was an increase of 2%, the slowest annual growth since July 2010.
First-time buyer numbers jumped by 19% during the month but there were still 1% fewer than a year ago.
“Despite making a short-term improvement after the post-stamp duty lull, there are signs that the mortgage market is tightening," said John Bagshaw, Corporate Services Director of Connells Survey & Valuation. "Much rests on the success of the Bank of England’s new funding for lending scheme. If it proves successful, lenders will be able bypass increasingly expensive wholesale markets, boosting the supply of finance and giving the valuations and wider mortgage market a shot in the arm.”
Remortgaging contributed to the slowing annual growth with the number of valuations for remortgagors declining by 6% compared to June 2011. In total, valuations for remortgagors contributed to one fifth of all Connells’ business which is the lowest proportion since May last year.
Meanwhile, buy-to-let investor numbers have continued to grow, with 16% more than in June 2011.
“With low rates and falling house prices in several areas, homeowners looking to upsize are taking advantage," said Bagshaw. "Landlords too have been looking to capitalise on the market. Many are remortgaging to unlock funds to re-invest and boost their portfolios, but we’re also still seeing new investors enter the sector to exploit strong yields and historically high tenant demand.”
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