The surge in activity has bolstered February’s figures with the total number of valuations carried out 50% higher than the previous month and only 4% lower on an annual basis, which was one of the smallest annual falls since September 2014.
Home movers led the surge with a 59% leap in activity on a monthly basis. Despite the strength of this upsurge, this leaves home mover valuations in February 8% lower than 12 months before.
John Bagshaw, Corporate Services Director of Connells Survey & Valuation, comments:
After an extended period of fairly subdued activity it is encouraging to see the market shake off its winter blues. 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.
“Previously activity among home movers was sluggish, reporting weak growth throughout Q4 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.”
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%.
John Bagshaw commented:
“The market always likes to see a lot of fresh newcomers enter the scene. The rebound in first time buyer activity will give the market a spring in its step as the seasonally cooler winter market comes to an end. To put this rise in perspective the last time the sector saw such a boost in activity was in the rush before the Funding for Lending Scheme stopped mortgage funding at the end of January 2014.
“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.”
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.
Remortgage activity followed the overall positive market trend with a leap just shy of 50%. Year-on-year it was the weakest sector with a 10% drop in the number of valuations.
John Bagshaw concluded:
“After the shock of December it is great to see the buy-to-let sector post substantial gains. 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.
“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.”
