The total number of residential property valuations in July was 10% higher than a year ago, reports Connells Survey and Valuation.
The rise came despite a 5% fall in first-time buyers, the lowest level since in July 2008.
The annual increase has been driven by homeowners looking to move, with the number of valuations for home movers up by 19% on July 2009 and an increase of 51% compared to July 2008.
Ross Bowen, managing director of Connells Survey and Valuation, says: “Restrictive credit conditions are still limiting progress – especially for first-timers who simply cannot secure the mortgages needed to get a foot on the property ladder.
“At present, many homeowners have emerged from negative equity, and are looking to trade up before house prices rise once more. This has compensated for the suppressed first-time buyer market. But more affordable and achievable mortgage products for first-time buyers are a must to generate further progress in the housing market.”
The number of valuations for buy-to-let investors looking to purchase rental properties has also increased by over a quarter year on year.
This is an even stronger performance than June, which registered an annual increase of 12%.
Bowen adds: “The higher Capital Gains Tax hasn’t made its mark on property investment. In fact, the recovery in buy-to-let has continued apace. In July, we conducted three times the number of valuations for buy-to-let investors than in 2008. With the shortage of affordable housing, and demand from frustrated first-time buyers pushing up rents, many prospective landlords are taking advantage of attractive yields before house prices rise further.”
And remortgaging activity grew in July with 18% more valuations compared to July 2009 but still remains half the level of July 2008.
Bowen adds: “The recovery in house prices has paused for breath, but activity hasn’t fallen away. Despite the uncertain economic conditions and a lack of tangible Government support for the housing sector, transactional activity has exceeded last year’s. But let’s not get carried away.
“Recovery will be steady and long-term, and dependent on the wider economy. There are still fears over the impact of the Government’s plans for fiscal tightening, and this is reining in consumer confidence. Many would-be buyers are waiting to see how their finances will be affected before committing to house purchase.”