Valuations fall but buy-to-let growing, Connells
New fixed-rate mortgages could boost medium-term numbers.
The buy-to-let market continued to prosper as total year-on-year valuations fell in July, research by Connells Survey and Valuation suggests.
According to the company’s latest Housing market activity report, valuations fell by 13 per cent year-on-year but showed an 8 per cent recovery compared with the previous month led by a significant increase in buy-to-let.
Buy-to-let was the only sector of the market not to shrink in July compared to the previous month, with the number of buy-to-let valuations also growing by 13 per cent year-on-year.
Valuations for buy-to-let properties now comprise 14 per cent of Connells’ valuations, up from 12 per cent in June.
John Bagshaw, corporate services director of Connells Survey and Valuation, said: “Lenders concerned about the effect of a deterioration in the eurozone have been concentrating on consolidating their balance sheets rather than new lending, putting the brakes on valuations activity.
“Nevertheless, the launch of the Funding for Lending scheme could well breathe new life into the housing market as the year progresses. If lenders grasp the opportunity for cheap finance with both hands, and pass this onto new buyers, we should see the housing market take a step towards recovery.”
In spite of lacklustre figures for the month, Mr Bagshaw is optimistic for the figures in the medium term due to a “flurry” of new attractive long-term fixed rates for homeowners with substantial equity.
He added: “However, it’s crucial that lenders do not forget about first-time buyers with smaller deposits. Any increased supply of cheap mortgages to these buyers will act as a catalyst for activity throughout the entire housing market.”