According to a housing market activity report by Connells Survey and Valuation, valuation activity has returned to levels which we have not seen since March 2007.
The number of valuations has grown by 29% monthly, with the total sum of residential valuations carried out in the month of March up 25% from the corresponding period last year -“ which also represents a sixth consecutive month of growth.
A Corporate Services Director at Connells Survey & Valuation, John Bagshaw, noted that even though the March just gone was the coldest on record for over 50 years -“ it did not slow progress. This year, the housing market has been struggling however such figures suggest that confidence is slowly returning. The last time there was such a large number of valuations in a single month was when HBOS announced a whopping £6bn profit and Northern Rock were aggressively expanding. If the trend was to continue the UK housing market could potentially recover quite sustainably rather than the usual spring spike.
Along with the high number of valuations, first time buyer activity was also the best in six years. The valuations for new buyers showed the fastest annual growth percentage of 33% – the highest of all sub-sections of the UK housing market.
Mr Bagshaw also comments that more competition at higher LTV ratios is beginning to make mortgages more readily available, but more importantly, affordable for new buyers. The latest Budget was essentially a relaunch of NewBuy and FirstBuy -“ however there have been notable changes. The timescale is now much more realistic as mortgage guarantees last until 2017. There is also a large £3.5bn budget for equity loans. This is all happening with the expectation that Bank rates will remain low for the foreseeable future -“ which of course signals that interest rates will also remain low.
On Monday 8th April 2013 -“ the Royal Institute of Chartered Surveyors announced that so far we have had the strongest quarter for house sales in three years -“ the more recent figures from March add to the rosy picture. John Bagshaw gives the impression that at the national level -“ the housing market is looking much more buoyant, despite the fact that some regions are still experiencing negative growth.
Remortgaging valuations also increased 25% year on year -“ which represents a 5 year high. Buy-to-let is another buoyant area of the housing market -“ as valuations in this sub-sector grew by 45% monthly -“ meaning this particular activity grew by 19% from the last year.
In conclusion -“ Mr Bagshaw notes that lenders are being encouraged to provide more loans with smaller deposits to cater for the new buyers. However, they are also being told to make sure their balance sheets are full with safer assets. The Buy-to-let area of the industry is very important in helping the housing market recover and additionally, higher levels of remortgaging will enable many UK homeowners to lower their repayments making financial life much more manageable.