While overall valuation activity in July dipped 24% compared to June 2015, it represented a 57% increase on July of last year.
John Bagshaw, corporate services director of Connells Survey & Valuation, commented:
“Housing market momentum is only getting stronger. The slight monthly wobble is more than outweighed by the sterling annual growth across all sectors.
“July has been a little more subdued than normal as the post-election ‘feel-good’ factor begins to taper out. But, fundamentally, the high pace of annual growth demonstrates that the property market is strong. As wages continue to outstrip inflation, job security increases and interest rates remain at record lows, people young and old are feeling ever more confident about the property market. There’s every reason to feel very optimistic.”
The number of valuations for existing owner-occupiers seeking to move home in July was down 33% compared to the previous month of June. However, yearly activity has climbed 48% on July 2014.
Similarly, despite the number of first-time buyer valuations slipping 25% on June 2015, year-on-year activity accelerated 40% compared to July last year.
John Bagshaw continued:
“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.”
Meanwhile, valuations in July for buy-to-let investors and remortgagors soared on a year-on-year basis. Buy-to-let and remortgaging valuation activity grew 76% and 75% respectively, when compared to July 2014. However, on a monthly basis, July’s buy-to-let valuation activity fell back 21% on June, while remortgaging activity declined by 16% over the same period.
John Bagshaw concluded:
“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.
“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.“
