The total number of residential valuations conducted by Connells during August fell by 10% compared to July.

However, despite this fall, activity remained higher than a year ago, with 1% more valuations than in August 2011.

“The housing market is traditionally slower in August, and this year proved no exception as the summer holiday season took its toll on the number of buyers looking to move,” said John Bagshaw, corporate services director of Connells Survey & Valuation. This seasonal drop-off was exaggerated by the Olympic focus, on top of the ongoing squeeze on lending, although this was not as great as many had expected.

“However, it is encouraging that despite the monthly dip, valuations activity remained higher than a year ago, and is already showing signs of bouncing back in September despite the difficult borrowing conditions.”

Connells said that growth in the buy-to-let sector was a main driver behind the annual climb in valuations, climbing by 31% on an annual basis.

Bagshaw added: “Buy-to-let is playing an increasingly significant role in the housing market, as investors are drawn in by the prospect of rising rental income, subdued purchase prices and increasing demand from tenants.

“Lenders have been cutting rates to tap into this demand, and the combination of rock-bottom mortgage payments and soaring rents has made property investment increasingly attractive.”

Meanwhile, remortgaging activity saw a smaller dip than the wider market, although it fell by 7% on a monthly basis and by 1% compared to last August.

“The unlikely prospect of a base rate rise is limiting remortgagors’ sense of urgency, and many borrowers are still sitting on their lender’s SVR,” said Bagshaw.

“But we are starting to see even cheaper mortgage rates filter through, a trend that is likely to continue as lenders make use of the Funding for Lending scheme. This could well increase the number of borrowers looking to lock-in to longer term, cheaper deals on offer.”