Getting a valuation is a key part of buying a home, and as a result, the volume of valuations recorded is a fairly good indication of the state of the mortgage market as a whole. Well, as with just about all other measures of market activity, it looks as though things are looking up, with the number of valuations recorded in December seeing a definite boost.
The figures, from Connells Survey & Valuation, show that the UK housing market has started the year on a definite high, with overall valuation activity in January rising by more than half compared with the previous year. In fact, the number of housing valuations carried out in January rose by 52% compared with January 2015, which represents the fastest annual uptick in total valuation activity since July 2015 (when activity was 57% higher than in July 2014).
Not only that, but the remortgage sector was the key driver behind this annual increase, mirroring the trend seen in mortgage approvals, with the number of valuations for remortgaging purposes up by an impressive 97% year-on-year. However, all other sectors noted improvement, too, with homemover valuations up by 27% and those for first-time buyers rising by 22%, while buy-to-let valuations were up 51% year-on-year.
Figures were also positive on a monthly basis, with valuation activity across all housing sectors rising by 13% between December 2015 and January 2016. In contrast to such strong annual performance, remortgaging was the only sector to see a monthly fall in valuations, down by 12%, but this could be in response to seasonal factors. However, all other sectors were able to shake this off and reported monthly rises, led by homemovers (valuations rose by 15%) and buy-to-let (up 11%), while first-time buyer activity rose by 5% month-on-month.
"The UK housing market has shaken off the traditional seasonal slump that it typically experiences in December and is beginning to make progress once more," said John Bagshaw of Connells Survey & Valuation. "With the financial strain of the festive period behind them, buyers and remortgagors have the space and resources to focus their attention on climbing the property ladder again."
However, as John points out, it isn't just the disappearance of the festive slowdown that is driving activity – for landlords, the upcoming 3% stamp duty surcharge on buy-to-let properties will be weighing heavily on their minds, and as a result, many will be looking to complete their new purchases before they're lumbered with this additional charge.
Not only that, but the property market "is also being buoyed by the recent announcement from the Bank of England that interest rates will be kept at rock bottom levels for the foreseeable future", added John, which is encouraging further activity as buyers are looking to take advantage of the market.
"So long as this remains true – and the general economic outlook stays healthy – acting sooner rather than later will seem the most sensible option to buyers and remortgagors," he said. So why not get involved?
Many homeowners are still paying high mortgage rates when they simply don't need to, and if you're one of them, it's time to take action. Remortgaging when rates are at such historically low levels could be a very wise move, allowing you to reduce your monthly repayments for the foreseeable future, and if you're a first-time buyer, you're entering the market at a fantastic time!
The volume of affordable homes being built is steadily on the rise and Government schemes such as Help to Buy are providing a valuable crutch, and these factors, combined with wage growth, mean that potential buyers are becoming evermore confident. Overall, 2016 has started with a bang for homeowners and buyers of all kinds, so take advantage of the market by comparing the top mortgage rates and see if you can benefit.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.