Residential mortgage valuation activity increased by 22% year-on-year in May due to rising demand from first-time buyers, according to Connells Survey and Valuation’s latest Housing Market Activity Report.
Activity increased by 9% in May compared to April, which was driven by a 10% rise in valuations for first-time buyers over the same period.
In May, there were 26% more valuations for first-time buyers than in May 2010, with first-time buyers now making up 34% of all valuation activity.
The increasing number of homeowners looking to move also played a crucial role in the rise in activity compared to April.
The number of valuations for home movers in May was up 11% on the previous month, and 1% compared to May 2010.
Colin Dorman, business development director at Connells Survey and Valuation, says: “Housing market activity has resumed its slow and steady upwards trajectory, driven by an upturn at the lower end of the market.
“Many first-time buyers have been encouraged to enter the market by the uptick in the number of higher LTV products available recently.”
However, Dorman points out that the average first-time buyer still faces a challenge in obtaining mortgage finance, with rates remaining high and lenders’ criteria still tough.
The survey also shows that the number of valuations for remortgagors rose by 8% compared to April and 70% compared to May 2010, while valuations for buy-to-let investors fell by 3% compared to April but increased by 42% compared to May 2010.
Dorman says: “Remortgaging levels picked up in May as competition between lenders improved, and borrowers took advantage of more lucrative fixed rates on offer.”
He adds that the private rental sector will continue to play a crucial role in the housing market until there is a prolonged improvement in the number of first-time buyers able to secure a mortgage.