The total number of valuations conducted during August was just 4% lower than in July, compared to historic average decline of over 9% between July and August.
In fact, the number of valuations conducted by Connells grew significantly year on year, with a 49% increase.
John Bagshaw, Corporate Services Director of Connells Survey and Valuation, comments:
“We’ve had our strongest August since 2007 – and the expected August dip hasn’t really materialised. Valuation activity was 96% of the level in July, and with the summer holidays coming to a close, we expect it to pick-up pace as September progresses.
“Against an uncertain economic backdrop, we don’t foresee a sustained surge in the mortgage market or housing market, but there are signs that transaction and remortgaging activity is beginning to improve.”
Remortgaging was pivotal to the performance of the valuations market in August. It was the only category where activity grew month on month, rising by 11% and was more than double its level in August 2010 (+108%).
John Bagshaw continues:
“Interest rate hikes are no longer on the horizon this year, but rock bottom fixed rates have proved too tempting for an increasing number of homeowners.
"Falling swap rates have allowed banks and building societies to cut their mortgage rates in attempt to grow market share. As long as this competition continues to drive down mortgage rates, remortgage activity will continue its recovery apace.”
The growing number of buy-to-let investors looking to buy properties contributed towards the annual rise in activity. During the month, there were 85% more valuations conducted for prospective property investors than a year ago.
Although purchase activity by owner-occupiers and first-time buyers fell slightly compared to July, it was significantly higher than in August 2010. The number of valuations for home movers in August was up by 42% on the previous year, despite a month on month dip of 9%.
The number of first time buyers on the move also picked up compared to last year, with an increase of more than a fifth (+21%), compared to August 2010 – although there were 5% fewer than in July.
John Bagshaw continues:
“House prices are still 13% below the 2007 peak, and with the improving affordability of mortgages, many frustrated first-time buyers are looking once again at house purchase.
"Although deposit requirements remain prohibitive in many cases, there is a greater variety of products available for new buyers – such as the 100% Family Guarantee Mortgage that the Connells Group has just launched in conjunction with Aldermore.
“Homemovers too are cashing in on cheap rates with many looking to move and upsize their property while mortgage payments are at historic lows for those with substantial equity.”
