The increase was fuelled by a 45% growth in remortgaging activity in July compared to the previous year, before the government had launched the Funding for Lending Scheme.
John Bagshaw, corporate services director of Connells Survey and Valuation, said: “Even as we enter the quieter summer months, the housing market is still roaring along at a thunderous pace. Annual growth of almost one quarter puts the number of valuations last month at twice the level of July 2010. We’ve certainly come a long way.”
Despite the annual rise, the total number of valuations was 30% lower in July than June in keeping with a typical seasonal drop-off in the market.
But the annual figures demonstrate the long-term improvement in the housing market as valuations activity accelerates.
Bagshaw said: “Over the summer Mark Carney and George Osborne might take a bit of time to contemplate the impact of Funding for Lending. It’s true that the wider economic benefits of the scheme are still uncertain. But here on the ground the benefits are clear.
“We’re already navigating a radically different housing landscape to the one we saw last year. The rapidly improving availability of mortgages is helping to make housing more affordable, and despite a slow start, volumes are starting to follow suit too.”
Remortgaging activity experienced the fastest expansion of any section of the market.
In July valuations for remortgaging purposes increased by 45% from last year despite a seasonal fall of 26% from the height of the early summer market in June.
Remortgaging now represents a larger segment of the market, at over a quarter of all valuations, compared to 23% last July.
Bagshaw added: “Healthier money markets and the return of competition for the best customers have both been crucial developments for borrowers over the last year.
“With households as cash-strapped as ever remortgaging can provide an effective way for homeowners to rebalance monthly expenses.”
By stark contrast home movers have seen the weakest growth of any sub-sector since the start of Funding for Lending.
In the last twelve months activity amongst those moving home, excluding first-time buyers, grew by 9%.
On a monthly basis, the number of valuations for home movers saw the sharpest seasonal fall. Home movers made up 30% of all valuations in July compared with 33% a year earlier.
Bagshaw said: “Even in better-off households up-scaling and perhaps taking on a larger mortgage just isn’t a priority. Many homeowners are still concentrating on paying down existing mortgages and other debts particularly as the labour market still feels very uncertain and interest rates seem likely to rise at some point in the next few years.
“It’s also worth remembering that many of those further up the property ladder are asset rich but cash-poor. Compared to other years before the crash, even when total activity was at similar levels, a larger home is much less prominent on people’s shopping lists.”
First-time buyers were more fortunate than established home movers. Activity on behalf of new buyers has grown 23% compared to a year ago despite a seasonal drop off by one third in the month since June.
And he added: “It’s worth noting that much of this progress has taken effect over the last few months. It isn’t clear whether that can be linked to a delayed effect from Funding for Lending or perhaps the first impact of Help-to-Buy.
“But what is certain is that right now things are getting better for a significant number of these new buyers.”
“However, there are still serious hurdles to mount. Given meagre wage growth, it’s still challenging for many new buyers to raise the required deposits. Progress is likely to be steady, and will probably only pick up dramatically if wages accelerate.”
