Strong growth in buy to let activity meant valuations work grew year on year for a third consecutive month in December, Connells Survey & Valuation found in its latest Housing Market Activity Report.
The number of residential valuations conducted by the firm in December was 2 per cent up on the same month in 2011. But within the total, buy to let valuations were up 22 per cent.
The total number of valuations conducted in 2012 was 12 per cent higher than in 2011 – the most annual activity since 2007. Within that, buy to let valuations increased by 33 per cent – representing 14 per cent of all valuations in 2012, an increase from 12 per cent in 2011.
‘2012 was the best year for the valuations market since the credit crunch began’, said Connells’ corporate services director John Bagshaw.
‘We usually see the market pause for breath in December, and this was certainly the case compared to November. But three months of annual growth in valuations show how the mortgage market is now making steady, if still gentle progress.
‘Buy to let was favoured more than anything else by conditions in the housing market last year. Alongside growing tenant demand and rising rates, buy to let borrowers, who tend to have substantial equity, have benefited from Funding for Lending bringing down mortgage rates even further at lower LTV bands. With the gap between rental income and mortgage payments looking lucrative, demand from investors is likely to remain strong as the year progresses’.
Bagshaw predicted that Funding for Lending will keep many mortgage rates low in 2013, but not all borrowers are benefiting. ‘In many parts of the country reduced equity is limiting the number of owners able to move or remortgage onto the cheaper rates on offer. It wouldn’t be only first time buyers who would gain from a greater availability of higher LTV mortgages – if this happens in 2013, it could be a great catalyst for the whole housing market’.