July sees subdued valuation and survey activity in UK housing market
Housing market activity in the UK in July was more subdued than normal but is still up 57% compared to the same month in 2014, the latest survey and valuation research shows.
However, overall valuation activity in July dipped 24% compared to June 2015, according to the report from Connells Survey & Valuation.
But, according to John Bagshaw, the firm’s corporate services director, the housing market momentum is only getting stronger and the slight monthly wobble is more than outweighed by the annual growth across all sectors.
‘July has been a little more subdued than normal as the post-election feel good factor began to taper out. But, fundamentally, the high pace of annual growth demonstrates that the property market is strong. As wages continue to outstrip inflation, job security increases and interest rates remain at record lows, people young and old are feeling ever more confident about the property market. There’s every reason to feel very optimistic,’ he explained.
The report also shows that the number of valuations for existing owner occupiers seeking to move home in July was down 33% compared to the previous month of June. However, yearly activity has climbed 48% on July 2014.
Similarly, despite the number of first time buyer valuations slipping 25% on June 2015, year on year activity accelerated 40% compared to July last year but Bagshaw believes that home movers and first time buyers are in a strong position.
‘At first glance the monthly figures might suggest we’ve endured a slow July. However, this is mainly because home movers and first time buyers are most affected by housing market seasonality. These two groups possess neither the capital of most buy to let investors or the pre-existing property of remortgagors. First time buyers in particular tend to be more sensitive to headwinds,’ he pointed out.
‘Moreover, the yearly figures indicate that first time buyers are showing no real hesitancy in getting on the ladder. Government schemes such as Help to Buy, alongside local authorities attempting to drive up property development, are giving the home mover and first time buyer markets a vitality not seen for many years,’ he said.
Meanwhile, valuations in July for buy to let investors and remortgagors increased on a year on year basis. Buy to let and remortgaging valuation activity grew 76% and 75% respectively, when compared to July 2014. However, on a monthly basis, July’s buy to let valuation activity fell back 21% on June, while remortgaging activity declined by 16% over the same period.
‘Remortgagors and those in the buy to let business have had an exceptional year’s stretch. Since the first glimmers of the economic recovery, remortgaging was the first sector to make up lost ground because it was viewed as the least risky by lenders and that momentum has obviously continued into this month. Meanwhile, the latest threats to the cheapest mortgage deals seem only to have boosted demand from borrowers looking to lock in the cheapest deals,’ Bagshaw explained.
‘On the back of the same currents, the buy to let market has seen a fantastic take off over the last year. The current high yields on rental properties, due to demand outstripping supply, alongside the widespread availability of low interest mortgage rates has drawn new investment to this sector in increasing numbers over the past year,’ he added.