Total activity in the UK housing market grew by more than a quarter last year, largely driven by the performance of the remortgaging and buy-to-let sectors, according to a surveyor.
Connells Survey & Valuation said that the total number of housing valuations carried out in December 2015 was 29% higher than the previous year, despite a seasonal dip of 17% in November.
The number of valuations for buy-to-let properties increased by a whopping 86% last year, while over the same period valuation activity among remortgagers rose by 34%.
John Bagshaw, corporate services director of Connells Survey & Valuation, said that the stamp duty changes coming into effect on 1 April had spurred many investors who might have been sitting on the fence to take the plunge into the buy-to-let market before its profitability takes a hit.
“The remortgaging market has typically been a strong performer over the last year. Home owners who lack the desire to take the risk and move are opting instead to remortgage in order to release capital on their home to use towards home renovations – improving rather than moving. For others remortgaging is more purely about switching to a better deal,” he said.
“A Bank of England rate rise now looks very likely at some point in 2016 – especially considering the US Federal Reserve has already raised their base rate. Many remortgagors realised this and, like buy-to-let investors, opted to take advantage of favourable borrowing costs while they lasted.”
Activity in the first-time buyer market grew by 19% in December compared to the same month in 2014, triple the annual growth rate of valuations for established home movers, which increased by 6% over the course of 2015.
However, the first-time buyer and home mover sectors were also affected by the seasonal downturn in the property market, with December first-time buyer and home mover activity falling by 23% and 22% respectively on a monthly basis.
John Bagshaw concludes: “First-time buyers and home movers appear to have traded places over autumn. Until then, it was the first-time buyer sector which experienced cautious growth, while the home mover sector enjoyed a healthy uptick. Now it’s the other way around.
“This is a positive sign. It demonstrates that first-time buyers finally feel they have enough support, both from the Government and the wider economy, to leave rental accommodation behind and take their first step on the ladder. They, like the wider housing market, ended 2015 on a high.”
