MortgagesSep 16 2014

Housing market on a ‘more sustainable track’

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Another survey has published evidence of a cooling in the housing market, as latest research from Connells Survey and Valuation shows an annual drop in UK housing market activity in August, in what is describes as a sign the sector is on a “steadier” and “more sustainable” track.

Over August, the total number of valuations carried out was 4 per cent less compared with August 2013. However, the total number of valuations carried out in August was 13 per cent higher than in July.

John Bagshaw, corporate services director of Connells Survey and Valuation, said that August has seen a bounce back from a particularly quiet July.

“Yet this is still quieter than a year ago. That’s partly because August 2013 was particularly strong [and] an exceptional month for comparison, being the first time where it was clear the property market was moving into sustained positive territory.

“Since last summer progress for the housing market is on a new, steadier, and more sustainable track.

“It’s worth remembering, activity is now up 5 per cent compared to August 2007, so hardly a poor base for future progress. Moreover, initial signs are positive for September and – barring unforeseen financial wobbles – the housing market is set for solid and sustainable progress through the autumn and into the New Year.”

New buyers still represent the largest sub-section of activity, according to the survey, which found they constituted a 30 per cent proportion of all valuations in August.

First-time buyer activity increased by 8 per cent compared to July. Despite this, a year-on-year fall of 4 per cent in the number of valuations for first time buyers is in line with the drop in total valuations activity compared to August 2013, Connells said.

On an annual basis, homemover activity is in line with an overall fall of 4 per cent since August 2013. However, valuations on behalf of home movers numbered 18 per cent more in August than in July.

Remortgaging has fallen the most sharply on an annual basis. Activity in this area was down 5 per cent compared to August 2013, despite an 8 per cent increase in the number of remortgaging valuations on a monthly basis, compared to July 2014.

In contrast, buy-to-let was the only area of the housing market where activity was higher than a year ago, up by 2 per cent compared to August 2013.

Between July and August, there was a 29 per cent increase in the number of valuations for buy-to-let purposes.

Mr Bagshaw added: “Continued annual growth is a sign of how far the buy-to-let industry has come, and the momentum with this activity looks set to be maintained for the rest of 2014.”