Housing market powers on after July "wobble"

Latest figures suggest housing market momentum is getting stronger despite a “wobble” in July that saw a sharp dip in activity.

Housing market valuation activity fell 24% month-on-month in July, although it was still 57% higher than the same month last year, according to new figures from Connells Survey And Valuation.

Similarly, first-time buyer valuations fell 25% on June but were still up 40% year-on-year.

John Bagshaw, corporate services director of Connells, said: “Housing market momentum is only getting stronger. The slight monthly wobble is more than outweighed by sterling annual growth across all sectors.”

He said the outlook for the housing market remains strong. “As wages continue to outstrip inflation, job security increases and interest rates remain at record lows, people are feeling ever more confident. There’s every reason to feel very optimistic.”

The latest Mortgage Monitor from e.surv, also published today, showed a 1.8% monthly drop in house purchase approvals to 65,356, largely due to rate-rise uncertainty.

House purchase approvals fell 0.2% year-on-year, after three months of strong annual increases

Richard Sexton, director of e.surv chartered surveyors, said: “The Bank of England has been beating the drum over a base rate rise that has yet to appear.

“Its hawkish rhetoric has had a knock-on effect on the mortgage market, with some banks beginning to withdraw their lowest-interest mortgage deals.

“In turn, this appears to have dampened demand for house purchase lending in the short-term, whilst stimulating remortgage activity."

Sexton said the mortgage market should be resilient in the face of this threat. “Reforms like the Mortgage Market Review have left us with a market built to ride out storms.

“Any increase to the base rate is likely to be slow and steady. The Bank of England has as much reason as anyone to be careful about rocking the boat."