According to recent research, May saw a fall in people moving home.
The data from Connells Survey & Valuation indicated that home seller valuations in May represented 27% of market activity, falling from just under half of market activity in May 2010 (45%).
Growing by 2% since April, remortgaging made up 23% of valuations during May, supporting the mortgage market as a whole. This percentage is also an all-time high for May.
The Connells report goes on to highlight the market factors responsible for reducing the motivation of homeowners to move. It states that a shortage of available homes, economic uncertainty and increased stamp duty have all contributed to homeowners being reluctant to move.
Commenting on the statistics was John Bagshaw. The corporate services director of Connells Survey & Valuation highlighted the slowdown the market was experiencing, drawing attention to the uncertainty induced by recent political upheaval and upcoming Brexit negotiations.
“The wind has been knocked out of the market’s sails. Fewer people are choosing to move home. The limited housing stock means that people already on the property ladder can’t see their next move in the market. After major votes and the economic turbulence of the past few years, many potential movers have adopted a near constant wait and see attitude. With a hung parliament heading into Brexit negotiations, the uncertainty in the market looks set to continue.
“The long-term increase in property values over the past seven years has reduced the financial incentive to move, with more homes slipping into the higher Stamp Duty bands. This means potential sellers could face a larger tax bill should they chose to move up the ladder when buying their next home, thus making it more difficult to free up housing stock to be used more efficiently.”
Despite seller valuations falling during May, remortgage valuations were 7% higher than the five-year average from the month.
Commenting on this, Mr Bagshaw stated: “An increasing number of homeowners are choosing to improve rather than move. While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging. With homes worth more than they were five years ago and low-interest rates on offer from lenders, many have taken the opportunity to refinance for a better deal. This should cut monthly repayments and provide some additional financial security to help homeowners get through any potential economic uncertainty ahead.”
