Increased remortgaging and buy-to-let activity meant the total number of residential property valuations conducted in December rose by 2% year on year, despite the flurry of first-time buyers rushing to beat the end of the stamp duty holiday at the close of 2009.
However, the expected seasonal slowdown and adverse weather meant that the number of total valuations fell 19% compared to November, although this was smaller drop than the 21% fall between November and December in 2009. In spite of the monthly fall, in fourth quarter of 2010, the total number of valuations was 2% higher than in Q4 2009.
The number of valuations for remortgaging was well up on 2009, rising by 88% from a low base at the end of last year.
Paul Staley, Corporate Services Director of Connells Survey and Valuation:
“Last December was boosted by first-timers hurrying to take advantage of the stamp duty holiday. But demand for valuations was resilient this December, buoyed by buy-to-let investment and remortgaging.
"The increased level of remortgaging compared to a year ago shows there are signs of life in the mortgage market as borrowers once again seek to lock into increasingly attractive fixed rate products. We are starting to see greater competition amongst lenders as they fight for market share – a factor missing over the past couple of years, which is a positive sign for the health of the market.”
Increasing numbers of property investors entering the buy-to-let market played a crucial role in the resilience of the December housing market. Buy-to-let activity rose by 8% compared to November – an increase of 53% from December 2009.
Staley continues:
“The valuations market has been bolstered by continued growth in buy-to-let investment. More attractive buy-to-let products are entering the mortgage market, and one in seven of our valuations now are for prospective landlords looking to take advantage of improving yields and fast rising rents in the private rental sector.”
First-time buyer activity dipped slightly in December, with the number of valuations for new buyers falling by 22% compared to November – a year on year decrease of 26%, thanks to the December 2009 figures being boosted by the end of the stamp duty holiday. The number of homemovers also dropped by 17% month on month, with a 4% decline on December 2009.
Paul Staley comments:
“Constrained lending means first-time buyers still face a tough challenge getting onto the property ladder. We’re going to need to see more co-ordinated action from the market if we are going make a real difference for first-timers this year.”
