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Rise in valuations points to market consolidation

Rise in valuations points to market consolidation

Category: Mortgages

Updated: 04/12/2009
First Published: 04/12/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A rise in the number of house valuations has fuelled hopes that the housing market is experiencing a period of consolidation.

Figures showing that valuation activity last month increased by over 50 per cent on last November suggest that a difficult year for the housing market may actually end on a more positive note.

The data from Connells Survey & Valuation shows that current homeowners were particularly active last month, with nearly twice as many requesting valuations on properties, compared with last November.

In fact, the last two months have seen 40 per cent more valuations conducted for homeowners than in the entire fourth quarter (October to December) last year.

"Despite fears over the effects of rising unemployment and an uncertain economic backdrop, we've seen the housing market stage a modest recovery. The upsurge in the number of valuations conducted is another sign of the distance the market has travelled since 2008," Ross Bowen, managing director for Connells Survey & Valuation, said.

"We have seen a year on year increase from all types of homebuyer. As house prices rise, we are seeing the effects of gradually increasing optimism in the housing market - boosting the demand for property from all types of purchaser.

"If this recovery in activity levels continues in the same vein, we should see a far more positive start to the new year."

The data has also revealed encouraging trends in the buy-to-let sector, with valuations for investors in the market rising by seven per cent in October and November, while transactions have risen by over a third on last November.

First time buyers are also showing a desire to get on the property ladder, despite the relative lack of mortgage products that do not require a sizeable deposit, with two thirds more valuations conducted for potential buyers.

However, the positive signs are slightly tempered by the impending end to the stamp duty holiday, which has been credited with breathing some life into a struggling market.

"The end of the stamp duty holiday will undoubtedly hold back some from moving next year," commented Mr. Bowen.

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