There has been a surge in remortgaging activity in June from both buy to let investors and owner-occupiers, according to the latest research from Connells Survey and Valuation.
The analysis has revealed growth in remortgage valuations is seven percentage points above the five-year average for June. Buy to let remortgaging alone accounted for 10 per cent of market activity, whilst standard remortgaging adds a further 23 per cent to this. When combined, the two types of remortgaging are responsible for more activity in the mortgage market than first time buyers, buy to let, or owner-occupiers seeking new homes.
Corporate services director of Connells Survey & Valuation, John Bagshaw, commented on the findings: ‘Low interest rates on offer are attracting owner-occupiers and landlords eager to offset rising costs. This has led to remortgaging activity more than doubling since 2009 as a percentage of the market, with a base rate close to zero for a decade. Many homeowners have chosen to remortgage to reduce monthly repayments, freeing up additional income. With the reduction in buy-to-let mortgage tax relief, landlords are also looking to cut their monthly repayments. When combined, buy-to-let remortgaging and traditional remortgaging are now a more significant segment of the market than first-time buyers – a stark contrast from a couple of years ago.
Bagshaw attributed the rise in refinancing and decline in first time buyer activity to political unrest and lack of guidance. He added: ‘The political uncertainty from Brexit and the hung parliament are encouraging consumers to refinance to ensure they are better prepared, should the economy slow down later in the year. The property market is struggling with a lack of leadership. The ministerial merry-go-round means we’ve had six different housing ministers in seven years. As a result, no one has been able to steer through policies which would step-up house building. Britain must start meeting its new home targets, allowing the supply of homes to match demand. If not, the proportion of first-time buyers looks set to fall further in the coming years.’