Valuation activity in UK property market increased in first month of 2016

The UK housing market has started 2016 on a positive note as overall valuation activity in January increased by more than half on an annual basis, according to the latest research.

In total, the number of housing valuations carried out in January climbed 52% compared to January 2015, the fastest annual uptick in total valuation activity since July 2015 when volumes rose by 57% on July 2014.

The data from Connells Survey & Valuation also shows that on a monthly basis, valuation activity across all housing sectors grew by 13% between December 2015 and January 2016.

John Bagshaw, corporate services director of Connells Survey & Valuation, believes that the recent announcement from the Bank of England that interest rates will be kept at rock bottom levels for the foreseeable future will boost the market further.

The firm’s report show that the buy to let and remortgaging sectors were the key drivers behind the strong growth of overall housing activity in January. The number of valuations for buy-to-let purposes grew by 51% between January 2015 and January 2016, while the remortgaging sector soared by 97% over the same twelve-month period.

Both sectors experienced steadier performances on a monthly basis, with the number of valuations carried out for buy to let investors in January up 11% on the previous month. Meanwhile, January’s remortgaging activity represented a 12% dip on December 2015.

‘Buy to let investors and remortgagors have enjoyed a busy start to the New Year. It might come as a surprise that there are still so many home owners who are paying higher rates, and so are opting to remortgage, when rates have been so low for so long. But ultimately it’s a shrewd move and one that is likely to remain popular with home owners so long as the Bank of England keeps rates at or anywhere near 0.5%,’ said Bagshaw.

He explained that while many buy to let investors are hurrying to expand their portfolios before the Stamp Duty changes in April, others are newcomers to the sector, who simply see buy to let as a good investment opportunity regardless of the tax hikes.

‘We can expect the buy to let sector to reach a height of activity over the coming months, as some concerned landlords look to counter the effects of any measure that could hit their profit margins,’ he added.
Annual valuation activity among home owners looking to move grew by 27% in January, while between December 2015 and January 2016 there was a 15% uptick in the number of valuations for home movers.

Meanwhile, first time buyers saw slightly more modest progress. Valuation volumes among those taking their first step onto the ladder in January grew 22% on an annual basis and 5% on a monthly basis.

‘First time buyers are also getting ever more confident. The volume of affordable homes being built is gradually increasing. This means the hunt for that ideal first home has become less daunting and more achievable,’ Bagshaw said.

‘On the plus side, the Government has given no indication that it plans to scrap schemes such as Help to Buy anytime soon. However, some savvy first-time buyers realise these won’t last forever. They’ll be eager to take advantage of these schemes sooner rather than later. But overall first-time buyers, like remortgagors, home movers and buy to let investors should be feeling fairly pleased with how 2016 has begun,’ he added.