Remortgaging activity is the highest in six years as households take advantage of record low rates to compensate for low wage growth.
The number of remortgaging valuations is up 9% in the 10 months to October, which means it has already beaten the previous annual record set in 2007, according to chartered surveyors Connells Survey & Valuation.
The number of remortgage valuations in October was 55% higher than 12 months earlier, despite a 26% monthly fall from September’s seasonal peak.
John Bagshaw, corporate services director at Connells, said: “Despite signs of economic growth, many in the UK are still coping with a fall in real wages. As a result, household finances are still feeling a serious strain.
“Given current record low interest rates, remortgaging can provide a real opportunity to boost the monthly sums. Even since a year ago, remortgaging interest rates have fallen, and the choice of deals on the market has dramatically improved.
“While economic growth will eventually feed into wages, there may be a long wait until this happens. So – for the time-being at least – lower mortgage payments will continue to provide a vital buffer for many households.”
The number of valuations for first-time buyers was up 37% on a year ago, despite a 20% drop in September.
Valuations for buy-to-let mortgages are up 42% on a year ago, the figures show. Again this was despite a seasonal fall of 25% from September.
Buy-to-let activity has continued to gain ground over the last year, Bagshaw said. "This has provided a welcome chance for lenders to balance their lending portfolios with more loans at lower LTVs – and an extra boost for the valuations industry.
"Moreover, buy-to-let activity is still being driven by solid demand from landlords. With many people still priced out of buying property, we expect this area of activity to keep growing for the foreseeable future.”
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