Connells Survey and Valuation has found that first-time buyers are making the most of the Help to Buy mortgage guarantee scheme while it still is available.
The firm has revealed that in September the number of valuations for first-time buyers rose by 18.7% on an annual basis.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Smart first-time buyers have been anticipating the end of the Help to Buy mortgage guarantee scheme and locking into it. Given the government confirmed the scheme would close this year in an announcement made at the end of September, those first-time buyers who have been jumping on the band wagon have been shown to be absolutely right.
“But we don’t expect that first time buyer activity will fall off a cliff when Help to Buy ends. The scheme was introduced with a specific purpose – to help people get on the property ladder who were finding it hard to save for a large deposit. There are now more than 30 lenders offering 90-95% loans outside Help to Buy so the scheme’s not as important to the market as it was. And other Help to Buy schemes will continue until 2020, including the five-year, interest free equity loans for new build homes and the Help to Buy ISA.
“On top of that, Philip Hammond has said he wants to prioritise spending on new homes and borrow an extra £2bn to speed up their construction. In his conference speech he said he would use ‘all the tools at its disposal’ to increase the amount of new housing stock, to help make housing more affordable. That should also work out well for first time buyers, too.”
Meanwhile, remortgaging valuation activity rose 14.7% year-on year. Despite the turmoil in the buy-to-let market over the last 12 months, there has been such a large increase in activity in this segment of the market over the last two months that valuations are 0.4% up on last year.
Bagshaw said: “Despite a bruising period of government intervention, the buy-to-let sector has been finding its footing over the last couple of months, recovering from the 3% stamp duty surcharge, the restriction of tax relief on mortgage finance costs to basic rate tax only, and the removal of 10% ‘wear and tear’ allowance. The government’s intervention had a significant effect in the short term but we appear to have recovered the lost ground now.”
There has been a slower pattern of activity on behalf of home-owners further up the property ladder. Valuations for established home movers have contracted 2.9% over the last 12 months. Overall September has seen the number of all property valuations increase 3.6% compared to the same month last year.
Bagshaw added: “Overall the valuation market is in good shape and is continuing to grow.”