Apparently mortgage activity in the UK picked up last month according to a new survey by valuers Connells, and the number of valuations increased by more than a third compared to August.
Overall the number of valuations increased by 11% during the third quarter compared to the second quarter, but when assessed annually the growth is far more impressive as there were 63% more valuations last month than in September 2010, when gross mortgage lending reached its lowest level since September 2000. The mortgage market in the UK has seen gradual improvement over the last few months, in spite of continuing economic difficulties. The report in the Property Wire pointed out there is a larger variety of cheaper products on the market, which has led to both buyers and those looking to remortgage taking advantage of continuing low interest rates.
Connells expects the valuations market to continue to perform well for the rest of the year, especially in the rapidly increasing buy to let sector. During September there were 54% more valuations conducted for potential property investors then in August, and the month saw an increase of 79% compared to September last year. Even though some of the cheapest buy to let mortgage deals have recently been taken off the market, landlords are still proving enthusiastic buyers, especially in light of the number of reports of rising rents and improved yields as house prices remain static.
Remortgaging levels have also increased during the last month, and now account for one quarter of all Connells valuations activity, especially as buyers now have their greatest choice in over three years. Even though interest rates look likely to rise, at least in the medium-term, many borrowers are choosing to look into a rate which will remain favorable for years to come.
Activity for first-time buyers and home movers also increased showing a 27% and 36% increase respectively compared to August, reflecting the improved state of the mortgage market. This improvement can be seen in some of the deals now available, as the Leeds Building Society has just launched a 1.99% mortgage, fixed for two years for buyers who are able to raise a 25% deposit and willing to pay a fee of £1,999. However experts have pointed out that someone needs to borrow more than £164,350 to benefit from the rates due to the arrangement fee.