"Over the last year, buy-to-let valuations have made up less than 10% of market activity, representing a new low in April."
Buy-to-let valuations dipped to 7% of market activity in April after the reduction to mortgage tax relief, according to research from Connells Survey & Valuation.
The proportion of buy-to-let valuations is 6 percentage points below the five year average for April and is now lower than it was in April last year when the stamp duty surcharge was introduced.
While buy-to-let valuations have declined as a proportion of market activity, buy-to-let remortgaging is 4% higher than the five year average for April, as landlords look to refinance.
Buy-to-let remortgaging is now responsible for 11% of total valuations in the market – a greater proportion of valuations than buy-to-let purchasing.
The proportion of first-time buyer valuations has also increased, rising from 32% in March to 34% in April.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “The Government’s anti-landlord policies have been hitting smaller players. Over the last year, buy-to-let valuations have made up less than 10% of market activity, representing a new low in April.
“This could suggest that smaller, private landlords, who typically use buy-to-let mortgages, have not been investing on the same scale as previously seen. Buy-to-let used to be seen as a viable way to gain additional income or to fund retirements, but the gradual removal of buy-to-let mortgage tax relief will make it much harder for the man on the street to invest.
“Having said that, buy-to-let valuations only fell 1% month-on-month and so the comparison with the five year average doesn’t always tell the whole story.
“First-time buyer activity has sustained the market, as buy-to-let borrowing has declined. It’s encouraging to see first-time buyer valuations pick up again in spring. First-time buyers have been responsible for more than 30% of valuation activity for over 12 months, as more aspiring homeowners get their first foot on the ladder. It remains incredibly difficult to save for a deposit, but the lower cost of borrowing, combined with less competition from landlords, has meant more first-time buyers have been able to purchase a home.”