Home movers driving property market

The growth in activity in the housing market is being led by existing homeowners moving on with far fewer first-time buyers around, said Connells Survey & Valuation.

The upsurge in the number of valuations from current owners, with twice as many as the year before was outstripped by demand in October, which was 75 per cent higher than the previous year.

Overall, transactions were up 26 per cent in October 2009 compared with the previous year, and up 13 per cent in the three month period, year-on-year.

Ross Bowen, managing director for Connells Survey & Valuation said: “This upswing in the number of valuations for homeowners is further evidence of the gradually strengthening housing market. Sellers who have been sitting out the recent economic woes who have seen double digit house price rises since the spring, are putting their homes on the market and moving on. The low level of activity over the past couple of years has created a lot of pent-up demand and people want to move - and established homeowners typically have more equity and are better placed to buy.”

The growth is first-time buyer activity was muted in comparison, said Connells, although data showed one third more valuations for first-time buyers in October than in the same month last year, while the three month period saw an upswing of 15 per cent.

The borrowing environment remains difficult, said Connells, with tighter income multiple/affordability tests and fewer 90 per cent loan-to-value mortgages.

Bowen said: “Lending conditions are still proving very challenging particularly for first-time buyers. Often they need to find a deposit of GBP 30,000 which is out of reach for nine out of ten of them.”

He added: “Home ownership remains the goal of many people in their twenties and thirties, despite underlying concerns over how unemployment will play out in the economy over the next few years. The sooner we can get more lenders in the 90 per cent LTV space on a consistent basis, without overly punitive criteria, the sooner we will see firmer footings in the housing market.”