Property market stalls in May as valuations for home sellers fall to 27% of whole market valuations

  • Home seller valuations have declined from 45% in May 2010 as fewer people move home

  • Valuations for remortgages rise to 23% of market as more people stay put

  • A shortage of housing stock, Stamp Duty impacts at higher levels, and economic uncertainty blamed for slowdown in moves by home sellers

The property market slowed in May as fewer people moved home, according to the latest research from Connells Survey & Valuation.

Valuations from home sellers have fallen steadily from 45 per cent of the market in May 2010, down to just 27 per cent in May 2017 as homeowners lack incentives to move.

The mortgage market is currently being supported by remortgaging which now represents 23% of all valuations – a 2 percentage point increase month-on-month and a record for May.

A shortage of homes on the market, Stamp Duty impacts at higher levels and the extended economic uncertainty have discouraged homeowners from moving on.

Selling property as a percentage of all valuations

John Bagshaw, corporate services director of Connells Survey & Valuation, said:

“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.”

Rise in remortgaging in May

While valuations from those looking to sell their home are down, remortgage valuations have risen by 7 points when compared to the five year average for May.

Market activity in May compared to the five year average

John Bagshaw, corporate services director of Connells Survey & Valuation, said:

“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.”

Kindly shared by Connells Survey & Valuation