January saw first time buyers returning to the property market quicker than any other type of customer, according to chartered surveyors Connells Survey & Valuation.
Last month saw 56% more new buyers than in December, significantly faster than monthly growth in all other areas of the housing market. On an annual basis this brings the number of valuations on behalf of first time buyers to levels 35% higher than January 2013.
“A certain New Year jump is normal – but this January has felt more like a stampede,” said John Bagshaw, corporate services director of Connells Survey & Valuation. The seasonal rebound between December and January has been significantly stronger than we usually experience.
“One factor is the effect of government schemes – the vast majority of Help to Buy loans have been taken out by first time buyers. But alongside this is a wider movement, fuelled by a general surge of confidence and a new willingness by lenders to target new buyers.”
Across all sectors, activity increased strongly in January – with total valuations activity up by 37% on a monthly basis, bringing the number of all valuations to levels one third (33%) higher than in January 2013.
Bagshaw said: “The winter lull is already over. Current weather conditions might still be causing havoc, but the housing market is feeling the full warmth of spring. Monthly conditions are still variable, but the economic climate is going the right way. Certainly, the ice age of the last seven years has well and truly thawed – and this is finally reflected in a flourishing housing market.”
Remortgaging activity saw the second fastest monthly growth, up 31% compared to December. On an annual basis, this leaves remortgaging the fastest growing area of activity, with the number of valuations for remortgaging purposes 56% ahead of January 2013.
Meanwhile buy-to-let valuations accelerated by 29% since December, leaving buy-to-let activity in January up 32% on an annual basis.
“Households look for the best deal to help sustain their monthly budgets, and remortgaging is still an extremely attractive option,” said Bagshaw. “But there is a certain sense of urgency in this area. Over the course of 2014 mortgage rates are likely to start rising. Moreover for many households, some of the best deals will be found before the end of April – when new, tighter regulations come into force in the form of the Mortgage Market Review.
“As a result, the next couple of months will remain busy for those hoping to catch the best fixed rates on the market.
“Landlords are among those searching for the best deals, yet this business should remain steadier for some time. First time buyers have come back to the market in dramatic numbers, but demand for rental property is still solid. So combined with steady capital accumulation from price rises the buy-to-let market looks set for consistent growth for some time.”
Established home movers saw slower progress than those on the first rung of the ladder. Valuations on behalf of those selling their home accelerated by 28% between December and January – half the monthly rate of growth for new buyers. Below-average monthly expansion leaves valuations activity on behalf of established movers up by just 16% on an annual basis, half the levels of overall annual growth.
Bagshaw added: “Homeowners looking to upscale are still the exception rather than the rule. Home movers have not made up such a small proportion of all activity since 2008. This situation is likely to remain the case for some time, until salaries start to rise in line with house prices.”
