Latest research from Connells Survey and Valuation reveals that March 2015 witnessed the strongest activity on record for property valuations in any month since 2007.
Following a 36% increase in activity on a monthly basis, the total number of valuations carried out in March 2015 has grown by 42% compared to March 2014.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Optimism looks to be catching, seeping from the wider economy and jobs situation into the property market. Looking ahead, election uncertainty is a real factor and not to be underestimated, yet a wider trend of buoyancy is definitely emerging.
“For half a decade surprises have tended to be unpleasant ones – but this spring the housing market is now surprising on the upside.”
First time buyers all but matched this rapid pattern of growth in total activity. The number of valuations carried out on behalf of new buyers has accelerated by 33% since February, leaving first time buyer activity up 40% from the same month last year.
Activity on behalf of those further up the property ladder also saw rapid growth, but at a slower pace than for first time buyers. Valuations on behalf of established home movers picked up by 32% on a monthly basis and by 23% over the last twelve months.
“New announcements like the Help to Buy ISA have combined with existing government schemes to boost interest from first time buyers,” said Bagshaw. “In the short-term this is mainly about sentiment, but extra support has been consistently focused at this end of the market for years now, with a longer-term impact too.
“Whether this is a good thing demands a political answer – but the housing market has definitely felt the effect. For a considerable time, activity at the bottom of the property ladder has grown faster than activity among households who already own their home.”
Remortgaging in March has outperformed the overall housing market, posting 54% growth on an annual basis, following a 33% month-on-month pick-up.
Bagshaw, said: “As the UK dips toward deflation the country is entering uncharted territory. We’ve already seen record low rates for six years, and there’s now a very real prospect of the base rate staying low for several more.
“In the property market, the practical impact has been lower mortgage rates than even at the beginning of 2015. Many households with a mortgage that seemed extremely competitive just a few years ago could find it in their interests to refinance, even to the security of a fixed rate. Such a recalibration of the mortgage market is working alongside a resurgent property purchase market to stoke demand for valuations.
“Of course a little further ahead, there is still the prospect of interest rate rises. In fact deflation caused by a volatile oil price could make a turning point for interest rates more dramatic as and when this occurs. So there is no space for complacency – although that isn’t stopping people looking for the best deals.”
With by far the strongest monthly increase, buy-to-let activity in March was 54% stronger than in February. This takes the number of valuations carried out on behalf of buy-to-let landlords to levels 64% ahead of March 2014.
Bagshaw added: “Landlords are responding to a pick-up in demand from tenants and a noticeable improvement in rental yields in some hotspots. It’s also possible this is another artefact of a booming jobs market, as people move to take up jobs.
“Meanwhile, landlords are generally low-LTV borrowers who tend to have reliable finances away from their property investments, so for lenders they offer a sound investment in a similar way to many remortgaging cases.”