First time buyers drive valuation growth
The yearly improvement followed a particularly strong monthly recovery from the festive period with a 16% increase in total valuations activity since December.
John Bagshaw, corporate services director of Connells, said: “By any measure 2013 has got off to a positive start. We normally see a gradual recovery from the festive hiatus but January’s valuations market has come bouncing back. Credit conditions have shown signs of easing in the New Year and those first-time buyers that can are taking advantage, boosting overall activity.”
First-time buyers were central to the strong overall growth seen in January – making up one third of the total valuations market for the first time since June.
Valuations on behalf of first-time buyers grew by 24% from December.
And in a fifth month of annual growth there were 40% more new buyers than in January 2012.
Bagshaw said a succession of months like January could start to feel like a sustained recovery for anyone hoping to buy their first home but continued innovation from lenders was needed to unlock the first-time buyer market.
He said: “But even if higher LTV mortgages are increasingly available this is only one half of the equation. A more attractive savings market will be vital to sustained growth in new buyers. At the same time as providing assistance for those who have a deposit, Funding for Lending is damaging savings rates and leaving potential new buyers exposed to inflation.”
Home movers were more active in January with a 6% monthly increase in these valuations.
On an annual basis this contributed to 40% growth in home-moving activity.
Meanwhile remortgaging bounced back strongly in January with a 29% monthly increase putting remortgaging valuations 31% higher than a year ago.
Buy-to-let activity continued to climb in the month to January to exhibit annual expansion of 41%.
By this measure buy-to-let was the strongest section of the market even after seeing the slowest monthly growth of only 3%.
Bagshaw added: “Buy-to-let is no exception to the positive mood in the rest of the market since the start of the year. Activity by landlords saw a sharp turnaround from what was a particularly quiet December compared to other types of valuations.
“However as a whole 2012 was a barn-storming year for the buy-to-let sector and continued demand from tenants will keep driving more investment.”