Connells says that between December 2014 and December 2015 the number of valuations conducted for buy-to-let properties soared by 86 per cent.
“In an environment of competitive mortgage rates and strong demand for rental property from tenants, the buy-to-let sector is always going to be a popular option for investors with the time to devote to being a landlord. However, the added factor of the April 1 stamp duty increase has spurred many investors who might have been sitting on the fence to take the plunge and enter the buy-to-let market before its profitability takes a hit” according to John Bagshaw, corporate services director for the agency.
The buy to let increase came despite a one per cent dip in BTL valuations in the single month of December 2015 - a fall described as a typical seasonal variation by the firm.
The BTL increase over the past year far outstrips the rise in valuations conducted for remortgaging purposes - up 34 per cent over the 12 months.
“The remortgaging market has typically been a strong performer over the last year. A Bank of England rate rise now looks very likely at some point in 2016 - especially considering the US Federal Reserve has already raised their base rate. Many remortgagors realised this and, like buy to let investors, opted to take advantage of favourable borrowing costs while they lasted” says Bagshaw.
Across the whole market, valuations - for whatever purpose - were 29 per cent higher in December 2015 than in December 2014; the rate of annual growth of all valuations over the past year was nine per cent.
“There is a steady confidence in the market that wasn’t present in 2013, or even 2014. December’s results are also a reflection of the ever-increasing demand for homes as investment opportunities, as buy to let landlords join home movers seeking to make some sort of profit from their property” according to Bagshaw.