Date Published 11 July 2012
The mortgage market is growing at its slowest annual rate in two years, says Connells Survey & Valuation.
While the total number of residential valuations conducted during June rose by 16% compared with May on an annual basis, this represented an increase of just 2% – the slowest annual growth since July 2010.
First-time buyer numbers climbed by 19% during the month as the short-term effects of the Stamp Duty deadline rush dissipated, but were down 1% on a year ago.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: `Despite making a short-term improvement after the post-Stamp Duty lull, there are signs that the mortgage market is tightening.
`The eurozone crisis has dampened banks’ ability to lend, while the double-dip recession is taking its toll on buyer finances.
`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 remortgages declining by 6% compared to June 2011, despite a 13% month on month increase.
In total, valuations for remortgages contributed to one-fifth of all Connells’ business – the lowest proportion since May 2011.
However, the number of home owners on the move produced 23% more valuations in June than in the previous month, contributing to an annual increase of 4%.
Buy-to-let investors also continued to grow annually, with 16% more valuations than in June 2011. Buy-to-let remortgagors also provided a bright spot for the remortgage market, with 32% more investors seeking to remortgage than a month ago.