Property valuations in January did not rebound from the previous month’s cool down and fell further, according to the latest research from Connells.
Compared to December 2014, valuations were down by 4 per cent and on a yearly basis there was a 23 per cent slide.
“The expected post-holiday pick-up in activity failed to materialise with the market making a very restrained start to the year. Mediocre comparisons are due in part to the exceptional performance seen in January 2014 as a result of a healthy pipeline at the end of Q3 2013. In contrast, the transaction market slowed dramatically towards the end of last year. However, this slow start is not a cause for alarm as January is typically a slower month with lower volumes of activity,” John Bagshaw, corporate services director of Connells Survey & Valuation, said.
Buy-to-let stood in stark contrast to all other sectors of the housing market, recording a month-on-month jump in activity of 37 per cent. Compared to a year ago, there was a small fall of 4 per cent.
Bagshaw explains the monthly surge in valuations with the wide variety of mortgage products for potential and existing landlords currently on the market. Low mortgage rates also make deals in that sector more attractive.
The only other sector to record a monthly increase in January was the first-time buyer one. Valuations here edged up by 3 per cent on December 2014, but on an annual basis first-time buyer activity registered the biggest fall (28 per cent). The drop was due to the unusually high activity a year ago when first-time buyers rushed to take down a mortgage before the Funding for Lending Scheme (FLS) was introduced.
“However, this month on month growth is encouraging and indicates that as the sector stabilises and adjusts to the new regulatory landscape, it should continue improving in the coming months, ” Bagshaw commented.
Valuations in the home movers sector fell by 4 per cent on the month and by 23 per cent on the year. There were double digit falls in both on a monthly (25 per cent) and on an annual basis (28 per cent) in the remortgaging sector.
The slide in remortgaging valuations stems from the current low interest rate climate, as customers prefer to wait to get even lower offers from lenders, according to Bagshaw.
