The total number of valuations carried out in April rose 24% year-on-year – a figure which counteracts the 22% short-term downturn that occurred in the market as a whole between March and April, according to Connells Survey & Valuation.
Every year since 2013, April has seen a decline in valuation volumes on a monthly basis. For example, between March and April 2015, overall valuation activity declined by 32% – 10 percentage points greater than the fall experienced over the same period in 2016.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “April’s property market is experiencing some vibrant long-term growth, regardless of any short-term indicators. The monthly downturn the valuation sector has experienced overall is a reflection of an historic trend which sees housing activity typically sink somewhat after a New Year surge. However, this year’s dip has not been as protracted as that of previous years’ – a sign the property market is becoming robust enough to endure these cyclical market forces.
“The longer-term picture is even more positive. As house prices continue to rise and interest rates remain at record lows, ever more people will be drawn to the property ladder.”
Activity in the remortgaging and first-time buyer sectors has been the key driver of annual growth in April’s valuation market.
The remortgaging sector saw the strongest annual uplift, growing by 50% between April 2015 and April 2016, while valuations carried out for first-time buyers grew by 46% on a yearly basis.
However, remortgaging valuation volumes in April also contracted by 25% on a monthly basis. Similarly, valuations carried out for first-time buyers fell by 15% month-on-month.
Bagshaw said: “Remortgagors and first-time buyers are the star performers of April’s property market. While the two sectors have still been somewhat affected by the seasonal slowdown, this has been more than counterbalanced by their performances over a 12-month basis.
“Remortgagors continue to take courage from the rock bottom interest rate – a rate which has spurred many homeowners to either switch mortgages for a cheaper rate or release the capital on their home. Equally, the political and economic momentum seems to be firmly with first-time buyers. They are currently basking in a range of government assistance packages, including a recently-extended Help to Buy scheme, as well as enjoying a confident lending market – as evidenced by new Barclays 0% deposit mortgage. The sum total of these schemes has transformed a once-cautious sector into one of the most vibrant in the property market – and there are few signs of that changing anytime soon.”
Valuation activity for home movers remained steady in April. Between April 2015 and April 2016, the total number of valuations carried out for those seeking to move home grew by 14%. On a monthly basis, home mover valuation volumes fell by 20%.
The buy-to-let sector was the worst-performing area of the property market, as April marked the first month of the Government’s new 3% Stamp Duty hike on second homes. Valuation activity on both a monthly and yearly basis fell by 41% in April.
Bagshaw added: “Home movers have had a more stable month than many other parts of the property market. The trend is nothing out-of-the-ordinary for this time of year. In fact, the sector is performing at a somewhat above-average rate, given the seasonal dip it usually experiences.
“Meanwhile, the buy-to-let market has endured a significant blip in April. But this is hardly a surprise. With April marking the first month of the Stamp Duty levy, many investors were always going to hold off until they could see how the new charge worked in practice. Expect activity in this sector to gradually pick up again over the coming months, as landlords gradually learn to account for the SDLT in their financial planning. Nevertheless, despite a buy-to-let slide, April’s housing market has revealed its underlying strength and appeal in the face of some adverse seasonal conditions.”
