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Mortgage market in New Year pick up

Mortgage market in New Year pick up

Category: Mortgages

Updated: 09/02/2011
First Published: 09/02/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Activity in the property market picked up at the start of the New Year after suffering its usual seasonal slowdown.

The latest data from Connells Survey and Valuation showed valuations with respect to residential properties got off to a flying start in 2011, with activity increasing 27% year-on-year in January.

An increase of 9% was apparent compared to December 2010, although delayed transactions and valuations which had to be put back because of Christmas holidays and the adverse weather are thought to have played their part.

Meanwhile, the number of valuations for prospective buy-to-let landlords rose for the second successive month, with 8% more valuations conducted in January than in December.

Remortgaging was said to have played a pivotal role in the boosted activity in January, increasing by over one third (35%) compared to December 2010.

"Despite the seasonal lull in the rental market, rents have remained robust, and prospective landlords are taking advantage of the increasing number of products entering the buy-to-let mortgage market," said Paul Staley, corporate services director at Connells.

"However, remortgaging levels are also climbing. The very public and ongoing debate amongst Monetary Policy Committee members over raising interest rates has also encouraged many borrowers to take advantage of low fixed remortgage rates, and lock in before an interest rate hike."

Encouragingly, the number of first-time buyers on the market increased in January, with 10% more valuations conducted for first-timers than in December.

Homeowners were also on the move at the start of the year, with 9% more valuations conducted for homemovers in January compared to the previous month.

"The onset of Christmas – and December's arctic weather – boosted activity in January," added Mr Staley.

"A large proportion of valuations were rescheduled in December, and many borrowers and buyers delayed decisions until after the New Year.

"But the seasonal phenomenon doesn't mask the underlying positive trend of growth, driven by a strong pick up in buy-to-let investment and remortgaging."

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