The latest Housing Market Activity Report by Connells Survey & Valuation saw a drop in activity in the valuations market in April.
The total number of residential valuations conducted during April fell by 32% compared with March.
The overall valuations market is performing better than a year ago, despite the monthly fall. Connells Survey & Valuation conducted 23% more valuations than in April 2011.
John Bagshaw, Corporate Services Director of Connells Survey & Valuation comments:
“After a hectic March by post-2008 standards, a combination of the hangover from the end of the stamp duty holiday and the interruption of the Easter holidays took its toll on the housing market in April. But the valuations market has not come to a standstill by any means, and is actually stronger than a year ago.”
Mr Bagshaw added that “for momentum to begin building again in the short-term, it’s crucial lenders don’t withdraw support for high LTV lending in the face of a technical recession and the ongoing eurozone crisis.”
After March saw a rush by first time buyers to beat the end of the stamp duty holiday, April saw a monthly drop of 28% of valuations. However, first time buyer activity in April was still 15% higher than in 2011, and formed 31% of all valuations.
John Bagshaw said:
“A blip in first time buyer activity was to be expected after many buyers brought forward purchases to beat the end of the stamp duty exemption. In turn, fewer chains were freed up, reducing the number of homeowners able to move compared to March. In spite of this, it is encouraging that both home mover and first-time buyer numbers are in better shape annually, pointing to underlying resilience in the market.”
Buy-to-let activity fell by 32% in April compared to March, but recorded an annual increase of 68%. Remortgaging also rose by 33% compared to 2011.
John Bagshaw commented:
“Both buy-to-let and remortgaging have been key to the annual improvement in the valuations market. Buy-to-let mortgage rates have remained competitive in recent months, and this has helped boost the demand from landlords looking to take advantage of healthy yields and strong underlying tenant demand.
“News that we are back in recession is likely to kick the prospect of a rate rise in the future into the long-grass, which will keep payments historically low for many borrowers, giving those on trackers less motivation to shop around. However, the trend of increasing variable rates will underpin demand for remortgaging and this sector is likely to see steady growth in coming months.”
As the news of the technical recession sinks in, it will be interesting to see what effect this has on the property market in the coming months.
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