Connells Survey & Valuation has reported there was a rebound in valuations activity on a monthly basis in September.
The total number of valuations conducted in September increased by 42% compared to August. However, this was not enough of a seasonal rebound to take valuations volumes ahead of September 2013. On an annual basis, housing market activity has decreased by 12%, a steeper fall than the 4% annual drop seen in August 2014.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Sustainability is the new watchword for the housing market. Higher interest rates are getting closer and caps on mortgage to income ratios officially come into force in October – both closely following MMR which has now become a settled feature of the landscape. In particular a base rate rise isn’t just a factor for the financial world. In the property market, buyers and sellers are increasingly factoring in slightly higher interest costs and a potential slowdown in house price growth.
“Steadier progress isn’t necessarily bad news. Autumn last year was exceptionally good for housing market activity. Now, as the UK searches for a long-lost measure of normality, the housing market is displaying sensible levels of caution – a healthy and often life-preserving characteristic. Stability will be important as activity keeps growing into 2015.”
Remortgaging was the strongest performing of all sections of the housing market in September. Compared to August remortgaging activity is up 57%, leaving remortgaging valuations down 9% since September 2013, the smallest annual fall.
Bagshaw said: “Remortgaging levels appear to reflect the wisdom of crowds. Most people don’t follow the detailed workings of monetary policy, and no-one can predict inflation or UK growth in six months’ time. And yet, they know which way the wind blows – households are taking advantage of cheaper mortgage rates now, as the perception grows that locking in to that market will not be possible for ever.”
First time buyers have seen the second fastest monthly pick-up in activity since August, up 39% on a monthly basis. On an annual basis, this leaves first time buyer activity down 13% compared to September 2013.
Activity was slightly more muted for those owner-occupiers moving home further up the property ladder, with such home mover activity up 32% compared to August. However on an annual basis the number of home mover valuations has seen the same 13% drop as first time buyers since September 2013.
Bagshaw said: “First-time buyers are proving unwavering. Many are now ready and determined to buy their first home after putting off the move for many years due to the financial crisis. Alongside this sheer number of potential home-owners, lenders are increasingly playing their part – even more willing to back new buyers, partly thanks to Help to Buy.
“The overall result is a consistent buoyancy for first time buyer valuations above more muted activity further up the chain.”
Buy-to-let is the section of the housing market with the greatest annual drop in activity, down 15% compared to September last year. This is despite a month-on-month growth in the number of valuations for buy-to-let purposes of 38%.
Bagshaw added: “Landlords buy and sell property according to a different timetable to owner occupiers. So a slightly slower than average autumn bounce could be reversed in the coming months.”
