This is the third successive month in which residential mortgage valuation activity has risen year on year. However, the increase wasn’t solely an annual rise. In February, the total number of valuations for residential property increased by 53% compared to the previous month following the end of the seasonal lull.
In part, increasing activity has been driven by a strong growth in the number of vendors entering the market and looking to move. In February, there were one fifth more valuations for homeowners moving home than a year ago – a rise of 81% month on month.
With 35% of all valuations conducted on behalf of home movers, this is the highest proportion of all Connells’ valuations since June 2010.
Paul Staley, Corporate Services Director of Connells Survey and Valuation, comments:
“It’s too soon to say the market has turned the corner, but there is certainly a growing optimism following a strong February, and talk of a ‘double-dip’ in the housing market has died away. In particular, the upper tier of the market has been uncharacteristically active as home movers look to buy or sell million pound properties before April’s stamp duty hike comes into play.”
Following the end of the seasonal lull, the number of first-time buyers on the market increased by 55% compared to January. Despite this monthly increase, there was an 11% fall year-on-year, highlighting the difficulty first-time buyers still face when seeking a mortgage.
Staley continues:
“It’s encouraging to see a slight month-on-month improvement for first-timers, but they still face an uphill battle to get their first home. First-time buyers are the lifeblood of the housing market. Without more affordable mortgage products for them, we won’t see a sustained recovery.
"To help this we have teamed up with Skipton to offer a 95% LTV mortgages to target first-timers, but we need to see even more initiatives from other players in the market. It’s imperative that lenders take action to encourage more on to the property ladder by offering more affordable mortgage deals.”
The number of valuations for prospective buy-to-let landlords rose for the third successive month, with 12% more valuations conducted in February than a year ago.
Remortgaging also played a pivotal role in the uplift in activity in February, increasing by 52% month on month. In fact the number of valuation surveys conducted for remortgagors has doubled since February 2010 (+107%), albeit from a very low base.
Paul Staley concludes:
“Buy-to-let has bounced back in the last few months as landlords look to exploit the current high rents – and strong demand from tenants who cannot get the finance they need to buy. Remortgaging too, has played its part in the surge of valuation activity in February.
"Nevertheless, much hinges on the decision of the MPC this month. If they send a clear signal that they are taking steps to counter inflation by hiking the Bank Rate – we will see a flurry of remortgaging activity as remortgagors act immediately before rates are substantially higher."
