The mortgage market has continued to slow, with buy-to-let the only segment showing growth as lenders applied the brakes everywhere else, Connells Survey & Valuation has reported.
It says the total number of residential valuations conducted during July fell 13% on June’s number, although it was up 8% compared to a year ago.
By contrast, the number buy-to-let valuations bounced up by 31% on a year ago. Buy-to-let valuations now make up 14% of Connells’ valuations, up from 12% in June.
The number of first-time buyer figures fell by one fifth compared to June, staying just 3% higher than in July 2011. The number of home owners moving also fell, dropping by 17% on a monthly basis, and down 1% compared to last July.
The number of remortgage valuations in July dipped by 1% compared to June, albeit rising by 18% compared to the previous year. Buy-to-let remortgaging made up 26% of all remortgaging activity in the month.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “The UK’s mortgage market continues to feel the effects of the financial crisis across the channel and the ongoing economic recession.
“Lenders concerned about the impact of a deterioration in the eurozone have been concentrating on consolidating their balance sheets rather than new lending, putting the brakes on valuations activity.
“Nevertheless, the launch of the Funding for Lending scheme could well breathe new life into the housing market as the year progresses. If lenders grasp the opportunity for cheap finance with both hands, and pass this on to new buyers, we should see the housing market take a step towards recovery.”
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At least the BTL market is fullfilling a need - property for people who are unable afford or get a mortgage somewhere to live.
“Nevertheless, the launch of the Funding for Lending scheme could well breathe new life into the housing market as the year progresses. If lenders grasp the opportunity for cheap finance with both hands, and pass this on to new buyers, we should see the housing market take a step towards recovery.”
First reports coming in is that Funding For Lending is being used to offer lower rates to the equity rich, ie, a flight to safety.
On the flip side, savings rates, which weren't exactly stellar, have fallen back in the last couple of weeks. The banks had begun competing for savers' funds, but that ground to a halt once the authorities stepped in and offered a different source of finance.
Net result? More money from prudent savers is going into the hands of equity rich and mostly older homeowners.