Housing market activity sees Spring bounce
This is according to the latest research by Connells Survey and Valuation, which found that residential mortgage valuation activity has risen year on year for four successive months. This, it believes, indicates a sustained recovery in the housing and mortgage market.
In the first quarter of 2011, valuation activity was 16% higher than in the same period a year ago.
In March, the total number of valuations for residential property increased by 5% compared to February – even allowing for the 15% more working days in March. In the first quarter of the year, nearly a quarter (24%) more valuations were conducted than in the previous quarter.
March also saw an encouraging increase in the number of first-time buyers entering the market, according to Connells. There were one fifth more valuations for first-timers (21%) than in February, and 26% more in the first quarter of 2011 than in the previous quarter. With 34% of all valuations conducted on behalf of first-time buyers, this is the highest proportion of all Connells’ valuations since September 2010.
Commenting, Colin Dorman, business development director of Connells Survey and Valuation, said: “The real barometer of the health of the housing market is activity and this is showing signs of picking up – with a welcome boost in first-time buyer demand.
“While we are still 4% below last year’s level in March, the recent increase in the number of higher LTV mortgage products helped breathe some life into the first-time buyer market, and first-time buyer numbers have risen steadily for four consecutive months.
“The government’s new FirstBuy scheme should provide added relief for a limited number, but the real lifeblood of first-time buyer market is mortgage finance, and we still need lenders to do more to fan the flames of recovery.”
Increasing commitment from buy-to-let investors has played a vital role in the pick-up in housing market activity. The number of valuations for prospective buy-to-let landlords rose by 14% in March compared to a year ago – 5% more than last month. In fact, in the first quarter of the year, there were 55% more valuations for property investors than in the same period last year.
Colin Dorman continued: “The resurgence of the buy-to-let sector continues apace as landlords look to exploit generous – and rising – rental incomes and strong demand from tenants who cannot get a foot on the property ladder. On the back of the changes to stamp duty on bulk property purchases, and the removal of REITs conversion changes announced in the budget, we should see pick-up in institutional investment, and the sector go from strength to strength.”
Although remortgaging activity dropped back slightly in March following February’s spike, there were 56% more valuations for remortgagors conducted during the month than in March last year.