16 Mar UK property valuations up 50% month on month
Valuations in the UK property market last month increased across all sectors with the total number 50% higher than in January, according to the latest research.
There was a strong surge in activity across the housing market but home movers led the way with a 59% rise in activity on a monthly basis, the data from Connells Survey and Valuation shows.
However, despite the strength of this upsurge, this leaves home mover valuations in February 8% lower than 12 months before.
‘After an extended period of fairly subdued activity it is encouraging to see the market rebound. It is especially positive that all the sectors posted big gains. The first quarter is normally a strong one so after a relatively weak January it is reassuring to see February come back so strongly,’ said John Bagshaw, the firm’s corporate services director.
‘Previously activity among home movers was sluggish, reporting weak growth throughout the final quarter of 2014 and at the beginning of this year. However, supported by a sunny economic outlook and record low mortgage rates we are beginning to see a shift in consumer behaviour,’ he added.
The data also shows that first time buyer activity reached an eight month high in February with the sector posting the second highest monthly growth after home movers. The number of valuations rose by 52% compared to the previous month, while on an annual basis it saw the smallest fall of just 3%.
Bagshaw pointed out that the last time the sector saw such a boost in activity was in the rush before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014 and he added that the recently announced Starter Homes project should provide more additional support to the sector.
‘Although the scheme is fairly moderate in size the 20% discount being offered to first time buyers under the age of 40 provides a welcome sign that the government is keen not to be seen to turn its back on first time buyers,’ he said.
The number of buy to let valuations followed up on January’s climb of 37% with a further monthly rise of 41% in February. Spurred by these monthly increases the sector posted an 8% year on year gain making it the only sector to post an annual increase.
Bagshaw explained that continued weak inflation has further dampened fears of an upcoming hike in interest rates. ‘As a result we’re seeing increasing confidence among both lenders and borrowers alike as low mortgage rates carry on posing attractive deals. Whilst inflation remains low we expect the sector to continue to thrive,’ he pointed out.
Remortgage activity followed the overall positive market trend with growth of just under 50% but year on year it was the weakest sector with a 10% drop in the number of valuations. Bagshaw said that remortgaging has picked up significantly compared to last month as borrowers take advantage of competitive deals.
‘For borrowers looking to cut their monthly costs there are still plenty of options out there, as the combination of low interest rates and price wars between lenders are helping to drive competition,’ he added.