No spring bounce yet as UK property valuations drop 9% in March – Connells
Total property valuations fell by 9% between February and March, leaving total activity at levels 10% below March 2013.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “March is usually a strong month for valuations, as the spring property market begins to heat up. But that just doesn’t apply this year. Lenders have had to devote serious time and resources, gearing up for a radically different way of assessing mortgage applications. This has rapidly fed through into the valuations industry, resulting in a sharp dip in the number of completed valuations.
He added: “However, this hiccup looks like a one off. There remains a significant backlog of demand from all sections of the property market, and we expect to see steady growth in the number of valuations for all purposes over the rest of 2014.”
Remortgage activity has dropped substantially from 35% of all valuations in February to 23% in March, where home buyer activity stayed broadly level. Buy to let was the only sector to see more valuations in March than April, up 2% month-on-month, but 7% down on last year.
Meanwhile, activity on behalf of first time buyers fell more quickly compared to February; down by 7% month-on-month. This equates to an 11% fall in new buyer valuations since last March.
However, Bagshaw said the picture , particularly on remortgaging, is optimistic for the rest of the year and the MMR is a necessary step toward “a property ladder that’s reliable at every step.”
Bagshaw said: “But after MMR, remortgaging will need to be done in a very different way – remortgage applications will often need to be treated with almost as much scrutiny as fresh loans. That shakeup for lenders is having a temporary but sharp effect on valuation volumes for remortgaging.”