There was an acceleration in valuations activity last month, with annual growth reaching 39%, according to chartered surveyors Connells Survey & Valuation.
The total number of residential valuations conducted in April was up by 39% from a year ago, compared to 24% annual growth in March.
A seasonal fall left the number of valuations 24% lower on a monthly basis, though this is significantly less than the 32% drop between March and April last year.
John Bagshaw (pictured), corporate services director of Connells Survey & Valuation, said: “Increased activity in April may demonstrate a crystallising sense of optimism in the housing market. This is the seventh month in a row of annual growth, the latest link in a lengthening chain of good news. It can in some part be attributed to Funding for Lending which started to work through the system in October.
“March was the strongest month for valuations since 2007, so even faster annual growth in April is only encouraging. It would seem that things are finally starting to look sunnier, as lenders’ balance sheets are more buoyant and government incentives help a wider range of borrowers gain access to finance. Certainly, the strongest April in six years is a good foothold for the rest of the year.”
Meanwhile, in the strongest April since 2007, there were 40% more valuations on behalf of first time buyers than a year ago. This compares to 33% year-on-year growth in March.
Bagshaw explained: “New buyers are of growing importance to the valuations market, as lenders report a record proportion of first time buyers taking out mortgages. Schemes like Help-to-Buy are allowing gradual improvements in credit at higher loan-to-value ratios, while interest rates look likely to stay low for some time. If lenders can expand the availability of these loans to make the most of government support, first time buyers will see even more progress throughout the year.”
Of all sub-sectors, remortgaging activity grew the most on an annual basis. The number of remortgaging valuations is now 55% higher than a year ago (despite a seasonal fall of 27% compared to March). In a similar vein, buy-to-let valuations remain 27% above the level of April 2012.
Bagshaw said: “Remortgaging still has huge appeal for owner-occupiers struggling to make their monthly accounts balance. Lower monthly payments are helping households pay down other debts and increasing wider consumer confidence. Meanwhile, cheaper buy-to-let deals help landlords increase the supply of rental property, and compared to previous years when repayments were rising, these deals put less upwards pressure on rents. For all those reasons, this activity is as important economically as any other type of valuation, and underpins current progress.”
This year has seen the strongest April for house sales activity since 2007. Valuations on behalf of home movers showed the smallest seasonal dip compared to March of any subsector, falling 18% on a monthly basis. This leaves the number of valuations on behalf of those moving house 34% greater than a year ago.
“Better mortgage availability is allowing prices to recover and feeding a general sense of optimism,” added Bagshaw.
“If salaries start to move in the same direction as the UK’s gradual economic recovery, then this picture could eventually begin to resemble the optimism that would have been called ‘normal conditions’ before 2007.”