Valuations up by half
Growing confidence in the housing market has been mirrored by a marked rise in the number of valuations for home purchase – suggesting that 2009 will end on a much more positive note than 2008. In October and November alone, the number of valuations conducted was higher than the whole of the fourth quarter of 2008.
Ross Bowen, Managing Director for Connells Survey & Valuation commented: “Despite fears over the effects of rising unemployment and an uncertain economic backdrop, we’ve seen the housing market stage a modest recovery. The upsurge in the number of valuations conducted is another sign of the distance the market has travelled since 2008. We have seen a year on year increase from all types of homebuyer. As house prices rise, we are seeing the effects of gradually increasing optimism in the housing market – boosting the demand for property from all types of purchaser. If this recovery in activity levels continues in the same vein, we should see a far more positive start to the new year.”
Current homeowners were especially active compared to the previous November, with nearly twice as many requesting valuations on properties. In the past two months alone, 40% more valuations were conducted for homeowners than in the whole of the fourth quarter in 2008.
Valuations for buy-to-let investors too have risen by 7% in October and November, compared with the fourth quarter of 2008, with transactions increasing by over a third on last November.
Ross Bowen went on: “The current housing market is attractive to both homeowners looking to move and property investors. Some of the value lost by homes has been recovered, prices are on the up, and many homeowners who have weathered the storm see now as the time to move. For cash-rich investors who are less likely to need mortgage finance, the housing market is ripe for investment. Rents have risen since 2008, properties are still affordable and beginning to show improved returns for investors who have bought recently.”
Despite requiring large deposits, more first time buyers are taking the first step on the property ladder. There were two-thirds more valuations for first-time buyers than at the same month last year, however this was from a relatively low base.
Ross Bowen added: “With an established trend of house price inflation, fears of negative equity are eroding fast. More first-time buyers are being tempted into the market, however difficult borrowing conditions remain. Higher loan-to-value mortgages at affordable rates are still few and far between – limited finance is still holding back thousands of first-time buyers keen to buy their own homes. The end of the stamp duty holiday will undoubtedly hold back some from moving next year.”