Valuations activity cools
The total number of valuations carried out in August was 13% higher than in July. However, this leaves valuations activity down on an annual basis, with 4% fewer valuations when compared with August 2013.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “August has seen a bounce back from a particularly quiet July. Yet this is still quieter than a year ago.
“That’s partly because August 2013 was particularly strong – an exceptional month for comparison, being the first time where it was clear the property market was moving into sustained positive territory.
“Since last summer progress for the housing market is on a new, steadier, and more sustainable track.
“It’s worth remembering, activity is now up 5% compared to August 2007, so hardly a poor base for future progress.
“Moreover, initial signs are positive for September and – barring unforeseen financial wobbles – the housing market is set for solid and sustainable progress through the autumn and into the New Year.”
First-time buyers still represent the largest sub-section of activity, with new buyers representing a 30% proportion of all valuations in August.
Compared to July, first-time buyer activity increased by 8%. However, a year-on-year fall of 4% in the number of valuations for first-time buyers is in line with the drop in total valuations activity compared to August 2013.
Home movers already on the property ladder fared better than first-time home-buyers in August, in contrast to previous trends.
Valuations on behalf of home movers numbered 18% more in August than in July. On an annual basis home mover activity is also in line with an overall fall of 4% since August 2013.
Bagshaw continued: “Since the recession, those further up the ladder have been more content to stay put in their homes – to stick with the asset they have.
“Such a strong showing from home movers looking to up-size is a positive sign for sentiment in the rest of the housing market.
“Meanwhile, first-time buyer activity has bounced back well from a particularly strong summer slowdown.”
By contrast, remortgaging activity has fallen most sharply on an annual basis, down 5% compared to August 2013. This is despite an 8% increase in the number of remortgaging valuations on a monthly basis, compared to July 2014.
John Bagshaw explains, “Remortgaging is certainly still on the agenda and still makes financial sense for plenty of households. This has just been on the back-burner a little over the summer period, when people have other things to think about.
“With the return from holidays, and as the “back to school” mood sets in, householders may start to reconsider their monthly finances. The long-term trend is clear – a higher base rate is on the way. The cheapest mortgage deals are only set to become rarer over coming years, so in the medium term remortgaging activity will reflect that.”
Buy-to-let was the only section of the housing market where activity is higher than a year ago, up 2% compared to August 2013. This comes after a 29% increase in the number of valuations for buy-to-let purposes between July and August.
John Bagshaw concludes, “Continued annual growth is a sign of how far the buy-to-let industry has come, and the momentum with this activity looks set to be maintained for the rest of 2014.”