The total number of residential property valuations conducted in September was up by a quarter (25%) compared to August, driven by largely driven by an increase in buy-to-let activity, which rose by 59% compared to August.
Overall activity fell slightly year-on-year, with total valuations down by 1% compared to September 2009.
Ross Bowen, the Managing Director of Connells Survey and Valuation:
“Market activity levels will suffer by comparison to the distorted market in late 2009, when buyers rushed to buy properties before the end of the stamp duty. But that doesn’t mean valuation activity is on the wane. We have continued to see slow and steady growth in buyer activity in the last three months. In the third quarter of 2010, activity was actually up 4% compared to 2009.”
The increase in buy-to-let valuations represented a rise of 79% on last September – albeit from a low base. In September, they accounted for 11% of all valuations – the highest proportion since Connells began compiling its data two years ago.
Ross Bowen comments:
“The buy-to-let market is seeing a mini resurgence. Rising rents and tenant demand have tempted many property investors onto the market – despite the recent changes to Capital Gains Tax. And buy-to-let mortgage finance is showing signs of loosening, allowing more would-be landlords to capitalise on strong yields.
"Buy-to-let lending was up 12% last quarter on the previous quarter, and 15% on the same times last year. It is great to see lenders like Paragon re-entering the market, and with competition on the rise we should see even more affordable products made available to investors.”
The monthly increase has also been pushed up by the increasing number of homeowners looking to move (+23%), and one fifth more first-time buyers on the market (+20%) compared to August.
Ross Bowen continues:
“Consumer confidence has continued to hold up well, despite uncertainty surrounding the direction of the housing market and the wider economy. The seasonal uplift in buyer activity has been compounded by the increased supply of property on the market, reducing the upwards pressure on house prices.
"Buyers have taken the opportunity to buy their first home – or upsize – from a broader selection of available properties before house prices resume their upwards march.”
Remortgaging activity also continued to rise, up 23% compared to last month. This represents an increase of 31% on remortgaging activity in September 2009.
Ross Bowen says:
“Remortgaging volumes are still low historically, but it’s good news that activity is continuing to head north. Record low interest rates have meant that many borrowers remained on tracker mortgages in the past six months. But with inflation at 3.1%, and talk of the MPC raising the interest rate in the near future, many borrowers have been remortgaging– and we expect this to continue over the next quarter.”
