Valuation activity stable despite decision to leave EU
Despite the shock decision of the UK public to leave the European Union valuation levels remain “surprisingly stable”, according to Connells Survey and Valuation.
Connells saw a 4% year-on-year increase in the number of valuations it carried out with it’s research also including the immediate period following the decision to leave.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “These figures for June capture Britain’s property market in the run-up to the EU referendum, but also include a glimpse of the final week of last month.
“So the background here is a collage of both uncertainty and shock. Yet the property landscape appears surprisingly stable – even framed by such drama. This is encouraging.
“Initial solidity from the post-Brexit housing market may not be enough to answer all the new legal and financial questions in light of the vote – or to offset a likely blow to confidence on the near horizon. But this should bring such fears into perspective. Life will go on and the property market will continue to function.”
Activity from first-time buyers accelerated during June, making up for a considerable slowdown in buy-to-let valuations.
Numbers taking their first step onto the property ladder rose 23% year-on-year, whereas buy-to-let valuations decreased by 40% over the same period.
This is on the back of 27% month-on-month growth for first-time buyer valuations, ahead of the general seasonal pick-up in total activity – while buy-to-let valuations increased by 17% since May, considerably slower than the overall picture.
Bagshaw said: ““First-time buyers continue to drive activity in the housing market, an emerging trend since the start of the year – and now reaching a new peak.
“Government schemes such as Help to Buy continue to be significant. But now a slowdown in the buy-to-let sector may be adding an extra short-term boost for new buyers, as competition from landlords diminishes a little, easing the hunt for a home for sale.”
Remortgaging has also seen a significant boost in valuation activity in June. The number of valuations carried out in June for those looking to remortgage rose by 18% on a twelve month basis and 19% month-on-month.
Home movers were more cautious. Valuations for existing home-owners looking to move to a new property decreased by 7% on an annual basis since June 2015. However the number of such home-owner valuations rose by 29% since May.
Bagshaw added: “Home movers have once again had a stable month, and this section of the market has enjoyed the strongest seasonal acceleration from May.
“Meanwhile, remortgaging is the other major winner from a time of consistently low mortgage rates – and a possibility of even lower borrowing costs over the summer. As seen in recent months many people are taking advantage of these rates and switching to better mortgage deals. While the coming months are far from certain, so long as lenders remain financially healthy there’s a good chance that expected lower interest rates could feed through to even better mortgage rates and a further wave of remortgaging activity.”