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Valuations activity in the UK housing market grew 9% year on year in 2014 despite a cooling in property price growth, according to the latest research from Connells Survey and Valuation. On a monthly basis, total valuations dropped 17%, however, this is slightly lower than the average decrease of 18% typically recorded from November to December for every year since 2010. ‘This latest increase in valuations activity does contrast with more rapid expansion recorded earlier in 2014. But a more balanced and sustainable pick up bodes well for 2015,’ said John Bagshaw, corporate services director of Connells Survey and Valuation. The firm’s data also shows that remortgaging is the strongest performing sector of the market. On a monthly basis, remortgaging valuations had one of the smallest falls of 7% and saw a robust 25% surge year on year to December 2014. According to Bagshaw thousands of households are taking advantage of the record low rates and this looks set to continue for the foreseeable future. He pointed out that just this week Barclays launched a new 10 year fixed rate at less than 3%. ‘At the same time, the relative strength in remortgaging activity in December can be partly explained by the fact it isn’t as heavily influenced by seasonal factors. While home movers and first time buyers may typically avoid a busy upheaval during the festive period, for remortgagers this period is not as disruptive,’ he said. ‘However, remortgaging has wind in its sales as we enter 2015. With the Bank rate set to remain at its historic low for some time, lenders will probably be able to offer even more competitive rates very soon,’ he added. First time buyer activity also saw significant annual growth. On an annual basis the number of valuations for first time buyers increased by 9%. This is despite the fact that valuations dropped by 16% compared to the previous month. By contrast, the buy to let sector of the market saw one of the biggest falls in activity both on a monthly and annual basis. Compared to November 2014, activity fell 33% while on an annual basis it was down 9%. ‘With an improving jobs market, greater mortgage affordability and consistent above-inflation wage growth it is clear that confidence is returning to first time buyers. Looking ahead, the recent changes to stamp duty and the ongoing Help to Buy Scheme should help this sector continue to perform well in 2015,’ said Bagshaw. He explained that after a slightly disappointing performance in October and November, first time buyer activity seems to have regained strength. ‘This sector of the property market was particularly affected by the spate of regulatory policies such as the loan to income caps. Coupled with rising house prices these lending restrictions have proven a hurdle for first time buyers,’ he added. But… Continue reading →
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