This is the second successive annual increase in residential valuation activity in January, but the growth was not just an annual improvement.
In January, the total number of valuations for residential property increased by 9% compared to December 2010, although a proportion of this figure can be attributed to delayed transactions and valuations which had to be put back because of Christmas holidays and the adverse weather in December.
Paul Staley, Corporate Services Director of Connells Survey and Valuation, comments:
“The onset of Christmas – and December’s arctic weather – boosted activity in January. A large proportion of valuations were rescheduled in December, and many borrowers and buyers delayed decisions until after the New Year.
"But the seasonal phenomenon doesn’t mask the underlying positive trend of growth, driven by a strong pick up in buy-to-let investment and remortgaging. We’ve seen a very strong start to 2011, and if activity continues in a similar vein throughout the year, we will see further growth in the valuation sector.”
The number of valuations for prospective buy-to-let landlords rose for the second successive month, with 8% more valuations conducted in January than in December.
Remortgaging played a pivotal role in the boosted activity in January, increasing by over one third (35%) compared to December 2010. One quarter of all Connells valuations are conducted for remortgagors – the highest proportion since December 2008.
Paul Staley continues:
“Despite the seasonal lull in the rental market, rents have remained robust, and prospective landlords are taking advantage of the increasing number of products entering the buy-to-let mortgage market. However, remortgaging levels are also climbing.
"The very public and ongoing debate amongst MPC members over raising interest rates has also encouraged many borrowers to take advantage of low fixed remortgage rates, and lock in before an interest rates hike.”
The number of first-time buyers on the market increased in January, with 10% more valuations conducted for first-timers than in December – although this was a slight dip of 7% compared with January 2009.
Homeowners too, were on the move at the start of the year. 9% more valuations were conducted for homemovers in January compared to the previous month, although this represented a drop of 5% year-on-year.
Paul Staley concludes:
“Despite a month-on-month improvement, we’re operating in a market where transactions levels are very low historically. The number of home buyers remains slightly down on last year, as the limited availability of mortgage finance continues to suppress first-time buyer activity.
"With inflation outstripping wage growth, and rising unemployment likely to impact buyers’ finances, the health of the wider housing market will be closely tied to the wider economy’s performance over the course of the year."
