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Buy-to-let defies January housing dip
January saw the buy-to-let sector
surge ahead of other areas of the
housing market, according to
the latest research from Connells
Survey and Valuation.
While most of the housing market
began the year with a subdued outlook,
buy-to-let bucked this trend and
was the strongest performing sector
with 37% growth in activity since the
previous month, and on an annual basis
the smallest dip of just 4%.
John Bagshaw, Corporate Services
Director of Connells Survey & Valuation,
comments: “The buy-to-let sector has
bounced back after a disappointing
performance in December when it
had seen one of the biggest monthly
falls. It now looks to have regained
that lost ground as landlords – now
spoilt for choice with a record number
of mortgage products to choose
from – begin to invest more. Low
mortgage rates have also continued,
posing even more attractive deals
for potential landlords or those
expanding portfolios.”
The first-time buyer sector of the
housing market was the only other
sector which saw a monthly increase
in valuations activity. On a monthon-month basis, activity for first-time
buyers increased by 3%, though on an
annual basis it saw one of the biggest
falls of 28% compared to January 2014.
John Bagshaw continues: “First-time
buyer activity increased on a monthly
basis despite a stark contrast in
performance with January 2014
when this sector had dominated the
housing market.
“This was largely due to the flurry of
activity as customers rushed to secure
deals before the Funding for Lending
Scheme (FLS) stopped mortgage
funding at the end of January 2014. At
the time the policy had boosted the
housing market, particularly first-time
buyers, by lowering mortgage rates.
“Since then, however, a series of
policies have been introduced that
have restricted lending criteria which
have affected first-time buyers more
than other sectors and consequently
had a major impact on demand.
However,
this
month-on-month
growth is encouraging and indicates
that as the sector stabilises and adjusts
to the new regulatory landscape, it
should continue improving in the
coming months.”
By contrast, activity for those already
on the property ladder has been
subdued. On a monthly basis activity
dipped by 4%, though compared with
January last year, valuations activity fell
by a steeper 23%.
Similarly, remortgaging saw one of
the biggest falls in activity both on
a monthly and annual basis. Since
December, recent activity fell by a
quarter (25%), while compared with
20 Landlord & Buy-to-Let Issue 57 • March 2015
January 2014 it decreased by 28%.
John Bagshaw continues: “The
current economic outlook indicates
that low inflation and therefore the lo