First-time buyer activity reaches four year high
The number of residential valuations conducted by Connells in February showed a monthly increase of 27% while annually total valuations activity grew by 23% representing the fifth month in a row of annual growth.
John Bagshaw, corporate services director of Connells, said: “The wider economy might not be nurturing bright green shoots quite yet. However for the housing market things are looking increasingly positive as a growing number of first-time buyers feed into overall activity.”
He said: “While more severe weather in January could have delayed some activity in February sentiment among buyers is improving. If last month’s trend continues spring will certainly have sprung for the valuations market.”
First-time buyer numbers in February were at a four year high as the number of valuations grew to its highest point in any month since March 2009.
New buyers outnumbered those a year ago by 13% with February seeing the sixth consecutive month of annual growth.
Compared to January, February saw 25% more valuations on behalf of first-time buyers.
Bagshaw added: “More affordable mortgage deals are starting to trickle through faster due to increased competition at higher loan to values. According to Moneyfacts lenders have introduced more than 300 new mortgage products aimed at first-time buyers since the start of Funding for Lending.”
Bagshaw said that due to increased traction from deposit schemes like FirstBuy and NewBuy, momentum is building inch-by-inch.
But he added that lending criteria remain tight and deposits must be easier to bring together if we’re to see more sustainable growth in new buyer numbers.
Remortgaging activity in February was up 44% from the same point a year ago after monthly growth of 33%.
This brings remortgaging to just over one quarter of all valuations for the first time since January 2012.
Bagshaw said: “Current mortgage holders are the biggest winners from Funding for Lending so far. Previous months have seen the lowest levels of remortgaging for some time but looking forwards that seems set to change.
“The only major obstacle could be high remortgaging fees which need to be weighed against the longer term saving.”
Home movers showed a 25% monthly increase in activity contributing to 16% annual growth.
Meanwhile buy-to-let activity was 26% greater than in February 2012 mostly down to a 24% pick up from January 2013.