Lending caps have weighed on the seasonal slowdown of the UK housing market this autumn, with activity falling in October.
Figures from Connells Survey and Valuation show that the number of property valuations fell by 20 per cent compared to September 2014. The slowdown is broadly in line with seasonal expectations, though says Connells, is "not an alarm bell". Indeed, every since 2010, there has been an average drop of 16 per cent in activity between September and October.
On an annual basis, activity dropped 10 per cent, an improvement from the steeper fall of 12 per cent in the 12 months to September 2014.
"The loudest signal here is one of stability," says John Bagshaw, Corporate Services Director of Connells Survey & Valuation, but highlights other factors contributing to the slowdown beyond the time of year.
"The introduction of stricter policies designed to restrain uncontrolled growth and protect against a return to the property bubble of 2008 have tempered the housing market. For instance the recent loan to income cap which came into force in October seems to have had a considerable impact," he continues.
2We may see a further seasonal lull in the housing market as we approach the holiday season. And looking further ahead, the General Election in May 2015 is also likely to bring increased caution with the prospect of policy uncertainty."
Buy-to-let performed the strongest in October, with a noticeably small annual dip of 7 per cent in the number of valuations compared to the rest of the market. Even on a month-on-month basis, this sector fared better than the others with the smallest drop of 17 per cent since September.
John Bagshaw attributes the sector's strength to lenders' focus on low risk investors as a result of increased regulation.
Nonetheless, first time buyer valuations made up almost a third of total activity in October (30 per cent), although the number of valuations for first timers still fell 18 per cent from September - better than the 21 per cent in owner occupier valuations.
Bagshaw adds: "While Help to Buy has supported many first time buyers to get on the property ladder, other new policies have introduced fresh limits to promote responsible lending. These new caps seem to have affected first time buyers and home movers the most."