The total number of residential property valuations conducted in July was 10% higher than twelve months ago and overall, the number of valuations rose despite a year-on-year fall in activity from first-time buyers.
In July, there were 5% fewer first-time buyer valuations conducted than a year ago, as valuations for first-time buyer activity dropped to the level seen in July 2008.
The annual increase has been largely driven by the increasing number of homeowners looking to move, with the number of valuations for home movers up one fifth (+19%) on July 2009.
This is an increase of 51% compared to July 2008.
Ross Bowen, managing director of Connells Survey and Valuation, said: “We’ve come a long way in the last year, despite fears of a further slowdown in the market.
"But restrictive credit conditions are still limiting progress – especially for first-timers who simply cannot secure the mortgages needed to get a foot on the property ladder.
"At present, many homeowners have emerged from negative equity, and are looking to trade up before house prices rise once more.
"This has compensated for the suppressed first-time buyer market. But more affordable and achievable mortgage products for first-time buyers are a must to generate further progress in the housing market.”
Buy-to-let showed signs of a prolonged recovery.
Despite the capital gains tax hike outlined in the budget at the end of June, the number of valuations for buy-to-let investors looking to purchase rental properties increased by over a quarter (+26%) year on year. This is an even stronger performance than June, which registered an annual increase of 12%.
Bowen said: “The higher Capital Gains Tax hasn’t made its mark on property investment. In fact, the recovery in buy-to-let has continued apace. In July, we conducted three times the number of valuations for buy-to-let investors than in 2008.
"With the shortage of affordable housing, and demand from frustrated first-time buyers pushing up rents, many prospective landlords are taking advantage of attractive yields before house prices rise further.”
Remortgaging activity grew in July, despite the constrained lending market.
Valuations for remortgagors increased by 18% compared to July 2008. However, remortgaging activity remains half the level of July 2008.
Bowen added: “The recovery in house prices has paused for breath, but activity hasn’t fallen away. Despite the uncertain economic conditions and a lack of tangible Government support for the housing sector, transactional activity has exceeded last year’s. But let’s not get carried away.
"Recovery will be steady and long-term, and dependent on the wider economy.
"There are still fears over the impact of the Government’s plans for fiscal tightening, and this is reining in consumer confidence. Many would-be buyers are waiting to see how their finances will be affected before committing to house purchase.”
