The number of property valuations in July went up by 57 per cent on the year boosted by the high activity in buy-to-let and remortgaging, the latest research from Connells Survey and Valuation shows.
Valuations for both buy-to-let (76 per cent) and remortgage (75 per cent) customers were three-quarters higher than in July 2014.
The economic recovery, high rental yields and the recent rush to lock in cheaper deals have all contributed to the boom in buy-to-let and remortgaging.
“Remortgagors and those in the buy-to-let business have had an exceptional year’s stretch. Since the first glimmers of the economic recovery, remortgaging was the first sector to make up lost ground – because it was viewed as the least risky by lenders – and that momentum has obviously continued into this month. Meanwhile, the latest threats to the cheapest mortgage deals seem only to have boosted demand from borrowers looking to lock in the cheapest deals, ” John Bagshaw, corporate services director of Connells Survey & Valuation, comments.
“On the back of the same currents, the buy-to-let market has seen a fantastic take-off over the last year. The current high yields on rental properties – due to demand outstripping supply – alongside the widespread availability of low interest mortgage rates has drawn new investment to this sector in increasing numbers over the past year,“ he says.
Valuation activity in the first-time buyer and home mover sectors of the market was also high compared to a year ago, with first-time buyer activity surging by 40 per cent and home mover valuations increasing by 48 per cent.
Nevertheless, while very strong in annual terms, on a monthly basis valuation activity dropped across all sectors of the market.
Buy-to-let and remortgaging suffered declines of 21 per cent and 16 per cent, respectively. Home mover activity was slowest compared to June, falling by 33 per cent, and first-time buyer valuations went down by a monthly 25 per cent.
However, one should not read too much into the monthly dip in figures, Bagshaw says and explains:
“Home movers and first-time buyers are in a strong position. At first glance the monthly figures might suggest we’ve endured a slow July. However, this is mainly because home movers and first-time buyers are most affected by housing market seasonality. These two groups possess neither the capital of most buy-to-let investors or the pre-existing property of remortgagors. First time buyers in particular tend to be more sensitive to headwinds.
“Moreover, the yearly figures indicate that first-time buyers are showing no real hesitancy in getting on the ladder. Government schemes such as Help-to-Buy, alongside Local Authorities attempting to drive up property development, are giving the home mover and first-time buyer markets a vitality not seen for many years.”
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