A new report from Connells Survey & Valuation has found that expanding growth in the property sector during March was fuelled by a rush of first time buyers breaking in to the property market.
During March, valuations jumped by 8% year-on-year and by 21% when compared to the previous month, mainly due to strong FTB activity.
The report also confirmed that FTB valuations increased by 41% compared to the previous month and 15% compared to March 2015.
John Bagshaw, corporate services director of Connells Survey & Valuation, commented: “March’s solid topline figure demonstrates the hardiness of the housing market, largely driven by first-time buyer activity. Increased determination on the part of this once-cautious sector, alongside a brightened economic outlook compared to a few years ago, have certainly been key drivers in activity.”
Remortgagors and home movers have also seen a significant boost in valuation activity. Total remortgaging volumes represented an increase of a quarter (25%) on February 2016, as well as reflecting a jump of a third (33%) on March 2015.
Home mover valuation activity grew by 4% in March on a year-on-year basis and leapt by 27% compared to the previous month.
However Stamp Duty changes have impacted the buy-to-let market, with valuation activity dropping 27% between February and March 2016, as well as dipping by 36% compared to the same month a year ago.
John Bagshaw concluded: “The buy-to-let market has endured a turbulent month but we expect this to be a short-term tumble, with investors adopting the standard-kneejerk reaction to legislative changes by proceeding cautiously. This is particularly true for a tax increase like the Stamp Duty shake-up. Many aspiring buy-to-let landlords may have realised that if they initiated a buy-to-let mortgage application in March, they would be unable to get it processed in time to beat the 1st April deadline. Instead, they may be taking their time in order to factor the changes into their financial planning.
More importantly, the fundamentals of buy-to-let remain unaffected by the new 2% levy. Home values continue to increase while high LTV lending remains accessible, meaning investors can more easily take advantage of the capital returns on offer from the property market. Equally, demand for rental property remains strong and potential yields remain appealingly high. As the year progresses, these benefits will be the silver lining that outshines the short-term cloud in the buy-to-let sector that the Stamp Duty hike has created.”