First-timers prop up slow July market

Compared to June 2014 first-timer activity dropped off the least, as the number of valuations decreased by 17% compared to 26% for buy-to-let, 25% for remortgagers and 19% for homemovers.

Annual increases were also led by first-time buyers, as activity has increasing by 23% since July 2013 compared to 3% for buy-to-let, 11% for remortgaging and 12% for homemovers.

John Bagshaw, corporate services director of Connells Survey and Valuation, said: “Emphasis on first-time buyers from lenders – partly due to government schemes – appears to be getting people onto the property ladder.

“We’re not on an open road to prosperity yet. After the summer slowdown, there will be more clarification on the long-term impact of various potential speed bumps.

“The limiter could be interest rate rises – or the fundamental squeeze on affordability for many would-be buyers. But with consistent double-digit annual growth in activity, there is now a growing sense that the housing market is running more smoothly.”

The total number of recorded valuations was 14% higher than July 2013 despite the slowdown.

Due to the monthly slowdown in remortgaging now makes up 26% of activity compared to 28% in June.

Bagshaw added: “Further up the chain, the market is more muted. Plenty of householders are content to sit on an appreciating asset, often sticking with a mortgage they know. Jumping in the deep end just before interest rates change direction feels like a leap of faith.

“A squeezed middle is still not feeling the full effect of recent good economic news – with many choosing to rejig their finances.

“Particularly ahead of a rate rise many will be looking to catch the fixed-rate train, even as lenders already start to price-in slightly more expensive funding over the next few years.”