Market activity accelerates in September
Strong growth in every sector of the market brought the total number of residential valuations conducted in September 2013 to 65% higher than the same point last year.
Particularly strong growth was recorded in the areas of buy-to-let and remortgages, which noticed a 66% and 64% monthly acceleration respectively.
This equates to much higher annual rates of growth, following a comparatively slow month in September 2012.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “September has felt like a tipping point.
“A year since the first real effects of Funding for Lending, and five years since the collapse of Lehman Brothers, the financial world appears to be at the start of a much sunnier period.
“In just twelve months, the situation has shifted unrecognisably with last quarter’s economic growth likely to come in above 1%.
“However, many borrowers have been reliant on remortgaging to fuel a good proportion of their new-found optimism. If not for record low product rates, many families could now be struggling to pay their mortgage while keeping the lights on at the same time.
“The real question now is how long these excellent new deals can last before the Bank of England decides to raise interest rates.”
Improvements in total levels of activity have also translated into more new buyers, as first-time buyer activity in September grew by 52% compared to August.
This leaves the number of valuations on behalf of first time buyers in September 54% higher than in the same month a year ago.
Meanwhile valuations further up the property chain, on behalf of existing home-owners wishing to move, have grown almost as quickly as those for first-time buyers, up 46% since August – bringing home-moving activity to levels 52% ahead of September 2012.
Bagshaw added: “Over the last year first-time buyers have witnessed a reversal of fortunes. Every part of the home-buying industry is straining to keep up with a rejuvenated lending system.
“After five years of relative inactivity, the only danger now could be the pace of improvement.
“What’s certain is that more people are able to buy a home. And the next rungs on the property ladder are looking far more solid than even a few months ago.”
After a minor seasonal slow-down in August, buy-to-let activity has bounced back strongly in September.
The number of valuations on behalf of buy-to-let investors increased by 66% between August and September. This leaves buy-to-let activity up by 77% since September 2012.
Bagshaw concluded: “September and early October are the very peak season of the rental market. But valuations for landlords hoping to expand their property portfolios now will only bring new homes onto the lettings market by around the end of the year.
“That’s why this is such positive news for the buy-to-let sector, because landlords are clearly confident that demand will still be there in several months.
“Progress on the supply of rental homes will remain vital for tenants who haven’t yet joined the ranks of first-time buyers.
“Luckily, there has never been a better time for landlords to expand portfolios, with buy-to-let mortgage rates the lowest they are likely to be for years.”