With 24% more residential mortgage valuations conducted than a year ago, despite the shortened working month. The valuations market recorded its busiest April since 2007. As a result of the annual increase, residential mortgage valuation activity has now risen year-on-year for five successive months.
Increase in valuations in April 2011 vs. April 2010
As expected, despite the annual increase, April recorded an overall drop in the number of valuations conducted compared to March. Valuation activity dipped by 14% month-on-month, although much of this was directly due to the shorter working days in April, five (14%) fewer than in March.
Colin Dorman, Business Development Director of Connells Survey and Valuation, comments:
“April tends to be a trickier month for the housing market with the onset of Easter and the sheer number of bank holidays reducing the volume of buyers hitting the streets and looking to move.
"In spite of the added distraction of the Royal wedding and a month-on-month drop in remortgaging, the market performed resiliently, surpassing the level of activity of a year ago. We don’t expect the market to drop off any time soon - pent up demand from buyers who postponed their house hunting in April is already trickling through.”
The annual increase has been largely driven by a strong increase in activity from property investors. In April, there were 43% more valuations conducted for prospective landlords than in April 2010, although this figure represents an 11% fall compared to March.
Colin Dorman continues:
“The buy-to-let market continues to pick up momentum as rents and yields for landlords go from strength to strength. Lenders are increasingly upping their level of lending to the buy-to-let sector, and many investors with sizeable deposits are taking advantage and are piling into the sector."
Although the number of valuations for remortgagors fell by nearly a quarter (24%) compared to March, it remained 50% higher than a year ago.
Colin Dorman says:
“With interest rates remaining on hold for the 27th consecutive month, there were fewer borrowers changing their mortgage – but this is temporary. This has filtered its way through to valuation activity, although levels remain in a much healthier state than a year ago. The arrival of higher rates over the months ahead will have a knock effect with remortgaging."
April also saw an encouraging increase in the number of first-time buyers entering the market compared to a year ago. There were one fifth more valuations for first-timers (19%) than in April 2010.
Homeowner valuation activity also increased compared to a year ago, increasing by 14% compared to April 2010, although this figure was down 6% compared to March.
Colin Dorman concludes:
“The bottom line is that the housing and mortgage market is moving – albeit steadily. However, to build momentum it is crucial that lenders up their commitment to helping first-time buyers on to the property ladder.
"While there are encouraging signs that banks and building societies are beginning to offer more attractive deals to some first-timers, we need to see far more to match the strong demand from the UK’s would-be buyers.”
