April sees fall in valuations

The total number of residential valuations conducted during April fell by 32% compared to March, according to Connells Survey & Valuation.

However, the firm still conducted 23% more valuations than in April last year.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “After a hectic March by post-2008 standards, a combination of the hangover from the end of the stamp duty holiday and the interruption of the Easter holidays took its toll on the housing market in April. But the valuations market has not come to a standstill by any means, and is actually stronger than a year ago.

“However, for momentum to begin building again in the short-term, it’s crucial lenders don’t withdraw support for high LTV lending in the face of a technical recession and the ongoing eurozone crisis.”

April saw 28% fewer valuations for first-time buyers than in March, which can be largely attributed to the rush to beat the stamp duty holiday deadine.

Despite the monthly change, first-time buyer activity represented a 15% increase compared to the same time last year, and accounted for 31% of all valuations.

The number of valuations for owner-occupiers moving home fell back in April, with 29% fewer than in March. On an annual basis, activity increased by 12%.

“A blip in first-time buyer activity was to be expected after many buyers brought forward purchases to beat the end of the stamp duty exemption,” Bagshaw said.

“In turn, fewer chains were freed up, reducing the number of homeowners able to move compared to March. In spite of this, it is encouraging that both home mover and first-time buyer numbers are in better shape annually, pointing to underlying resilience in the market.”

While buy-to-let valuation activity recorded a seasonal decline of 32% on a monthly basis, it increased by 68% annually – albeit from a low base. Remortgaging also registered an annual increase, rising by 33% in April.

Bagshaw added: “Both buy-to-let and remortgaging have been key to the annual improvement in the valuations market. Buy-to-let mortgage rates have remained competitive in recent months, and this has helped boost the demand from landlords looking to take advantage of healthy yields and strong underlying tenant demand.

“News that we are back in recession is likely to kick the prospect of a rate rise in the near future into the long-grass, which will keep payments historically low for many borrowers, giving those on trackers less motivation to shop around.

“However, the trend of increasing variable rates will underpin demand for remortgaging and this sector is likely to see steady growth in coming months.”