Mortgage market slows 'because of euro crisis'
The mortgage market continued to slow in July, according to data released by a property services firm.
The research, carried out by Connells Survey & Valuation, which came out yesterday, found while the total number of residential valuations conducted during July rose by 8 per cent compared to a year ago. They were 13 per cent down from June.
But the report also noted buy-to-let mortgages were bucking the trend, comprising 14 per cent of Connells’ estate agent valuations up from 12 per cent in June. The company blamed the continued slowing of the market on the eurozone crisis and the ongoing recession, but believed the funding for lending scheme, which was launched by the Treasury and the Bank of England last month, could boost mortgage interest.
John Bagshaw, corporate services director at 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.’
The scheme will allow banks and building societies to borrow from the bank for a period of up to four years, and those that increase their lending will be able to borrow more and for a lower cost.
Although first time buyer figures fell by a fifth compared to June, they remain 3 per cent higher than in July 2011. The number of homeowners on the move also fell, dropping by 17 per cent on a monthly basis, and 1 per cent compared to last July.
The number of remortgages rose by 18 per cent in July compared to the same month last year.
Valuations are carried out by lenders to ensure a property will be adequate security for the size of the loan. Connells Survey & Valuation includes a network of 470 estate agency branches.