A rush of first-time buyers looking to beat the end of the stamp duty holiday bolstered mortgage market activity in January, new data has revealed.
According to the latest Housing Market Activity Report by Connells Survey and Valuation, 43% more residential valuations were conducted last month than in January 2011.
A key factor in the rise was a surge in demand from first-time buyers, with the number of valuations conducted for those taking their first step onto the property ladder being some 52% higher than a year earlier.
Overall, demand from first-time buyers accounted for a third of all valuations completed last month, the highest proportion seen since June 2011.
The heightened first-time buyer activity comes as the stamp duty holiday for first- time buyers on properties worth up to £250,000 nears an end.
The initiative, which was introduced last year in an effort to stimulate activity in the housing market, draws to a close on 24 March 2012.
Once the tax exemption finishes first time buyers will face a tax of 1% on house purchases between £125,000 and £250,000, and 3% on purchases over £250,000, potentially adding thousands of pounds to the cost of a mortgage deal.
"The ongoing affordability of mortgages, not to mention lenders' increasing commitment to higher loan to value lending, has helped boost valuations activity," said John Bagshaw, corporate services director of Connells Survey and Valuation.
"However, there has also been a strong uplift in first-time buyer activity, with new buyers rushing to beat the end of the stamp duty holiday in March.
"In turn, this has unlocked activity further up property chains."
Meanwhile, the remortgage market also continued its annual growth in January, with remortgage valuations rising by 48% compared with a year earlier.
As a consequence, remortgaging accounted for a quarter of all valuations completed during January, the highest level since October 2008.
Claiming that greater product choice and low mortgage rates have both helped sustain the remortgage market, John Bagshaw added: "While an interest rate rise doesn't look on the horizon this year, many borrowers are looking to cash-in on cheap fixed rates while they can to provide long-term financial security in the face of an uncertain outlook for the economy."
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