This is according to the latest research by Connells Survey and Valuation, which also showed that following two consecutive month-on-month rises, the number of valuations conducted in the first quarter of 2010 was 15% higher than in the previous quarter (Q4 2009).
Ross Bowen, managing director of Connells Survey and Valuation commented: “The surge in valuation activity is great to see and reinforces evidence of the continuing recovery of the housing market. Despite uncertainty with the economy and post election impact on the housing market, we are seeing more buyers hitting the streets looking for homes. We have also yet to see the impact of doubling the threshold of the stamp duty tax for first-time buyers – however I expect the positive trend in the valuations market to continue in the longer term.”
The increase in activity in the first quarter of 2010 has been driven by an increase in first-time buyer activity - despite the end of the £175k stamp duty holiday on 31 December and the £250k threshold for first time buyers only starting on 25 March. In the first three months of 2010, 10% more first time buyers requested valuations than the last quarter of 2009, with a 12% month-on-month rise in March.
There was also a substantial quarter-on-quarter rise in valuations conducted for current home owners looking to move (+14%). This has been fuelled by an increase of just over one third in the number of valuations in March, compared February.
Ross Bowen said: “It’s very encouraging news that first-timers haven’t lost interest in buying a home following the end of the stamp duty holiday. In fact, we conducted only 16% fewer valuations for first-timers than we did in 2008 - and we are yet to see the impact of the doubling of the threshold for first-time buyers. However, high deposit requirements remain a significant barrier to many who wish to buy their home. We’ve also seen an increase in activity from current homeowners. House prices have risen significantly from their low in February 2009, and buyer confidence continues to be rebuilt. Homebuying is once again firmly on the agenda for homeowners. Transactional and associated surveying activity has been boosted as a result.”
Remortgaging and buy-to-let activity also increased – valuations for buy-to-let investors rose by 19%, while remortgaging business increased by 38% compared to the levels in the last three months of 2009. However, this was from a low base. With mortgage finance not as readily available as before the credit crunch, remortgaging valuations were still less than one third their level in March 2008. Buy-to-let was just 5% lower than 2008 levels.
Ross Bowen concluded: “Mortgage finance still remains a challenge for many buyers and remortgagers, but there are signs that lenders are beginning to offer a wider range of products and relax their criteria – several are now offering 90% LTV products. The thaw in the mortgage market and the stamp duty tax-break for first-time buyers will help activity levels moving forward.”