The number of property valuations increased by more than a third in 2013 as existing homeowners looked to secure better mortgage deals.
Figures from chartered surveyors Connells show that the number of valuations grew by 35% last year, with the pace of growth accelerating towards the end of the year.
November proved to be a record-breaking month for property valuations, following the expansion of the Help to Buy scheme, while December saw a 12% rise on the same month in 2012.
Remortgaging activity was particularly strong after rising by more than half, Connells said, as homeowners looked to release equity in their homes and secure better mortgage rates.
The impact of Government schemes such as Funding for Lending and Help to Buy were also evident as valuation activity surpassed pre-crisis levels. 7% more valuations were carried out for first-time buyers in 2013 than the year before.
Connells’ John Bagshaw said the level of housing market activity seen at the end of 2013 had stunned sceptics.
“Confidence in the property market has reached levels not seen for more than five years, and some months have even surpassed 2007 levels of activity,” he said.
“The valuations industry is gearing up for an even busier 2014.”
Why the Rush to Remortgage?
There are several reasons why large numbers of homeowners have taken measures to remortgage their properties.
Most notably, home loan rates continue to be low and ultra-competitive. In 2011 we were celebrating the availability of 90% LTV mortgages at a then-knockdown rate of 5.39%.
The best deal currently available at this loan-to-value range is almost two percentage points lower, at 3.48%, via the Post Office. On a £150,000 mortgage, this would save more than £3,600 (£160 per month) over the two-year offer period.
For those who have built up more equity in their homes, an 80% LTV remortgage option is available at 2.39% with a fee of just £200 (West Bromwich), while a 60% LTV remortgage is available from just 1.63% (Post Office) – though a slightly higher rate and lower product fee may prove cheaper depending on the size of the mortgage.
But these rates are not likely to last forever. The Funding for Lending Scheme, which has contributed towards cheaper mortgage rates since August 2012, is now being redirected towards small business lending.
And any rise in the Bank of England interest rate as the economy stabilises and unemployment falls will adversely affect any mortgage lenders not already on fixed-rate deals.
So, many are looking to tie into cheaper deals for the foreseeable future while rates are low, fully aware that failing to act now could see a priceless cost-cutting opportunity pass them by.
For more information, why not check out our related guides:
- Remortgages Explained.
- First-Time Buyers: Where to Begin.
- Mortgage Arrangement Fees: Working Out the Best Deal.
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