Summary:
The article discusses the current state of the real estate market in London, focusing on the challenges faced by first-time buyers. It acknowledges the anxiety and confusion caused by conflicting information and headlines about falling house prices and mortgage chaos. Despite these challenges, the author suggests that now may be a good time for renters with stable jobs and good savings to consider buying a property. They highlight the competitiveness and rising costs in the rental market as a motivating factor to enter the housing market.
The article also addresses concerns about falling house prices and advises against waiting for further drops in prices, as timing the market accurately is difficult. Instead, the emphasis is on choosing a property that can accommodate changing needs over time and provide flexibility. The importance of location, possible renovations or extensions, and the potential impact of upcoming developments are discussed as factors to consider when buying a property. The article also encourages readers to prioritize their personal circumstances and goals when deciding to make a move.
Engaging additional piece:
Buying a property, especially as a first-time buyer, can be a daunting decision. With the uncertainties and challenges in the real estate market, it’s natural to feel overwhelmed. However, it’s important to remember that while external factors like house prices and mortgage rates certainly have an impact, the most significant consideration should be your own circumstances and aspirations.
When deciding whether to buy a property, it’s crucial to take stock of your current situation and future goals. Consider factors such as job stability, financial readiness, and long-term plans. Are you ready to settle down or are you likely to relocate in the near future? Do you require a property that can accommodate changing needs, such as working from home or starting a family? By carefully assessing your own needs and aspirations, you can make a decision that aligns with your personal goals and provides you with a sense of stability and security.
Additionally, it’s worth exploring areas that are undergoing regeneration or showing signs of upcoming development. These locations often present opportunities for growth and improved amenities, making them attractive investment choices. While it may require some patience to see the full benefits of these changes, the potential for long-term appreciation can make it a worthwhile decision.
Ultimately, while market trends and external factors should be considered, it’s essential to prioritize your own circumstances and goals. Real estate is not just an investment; it’s a place to call home and create cherished memories. By making a decision based on your personal situation and aspirations, you can find a property that truly aligns with your needs and brings you joy for many years to come.
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ortgage chaos! house prices falling! Developers tearing down tools! The headlines right now are terrifying and there is a lot of conflicting information out there.
It is perfectly understandable that people feel anxious about the real-estate market. After all, no one likes to make big decisions about whether or not to buy or sell when they aren’t clear on what’s going on.
It is difficult for everyone at the moment and those Londoners who are faced with thousands of pounds a year added to their mortgage payments you will feel the sting.
But I would say that it is especially difficult for the aspirants first time buyers They really are stuck between a rock and a hard place.
For one thing, mortgage products are being withdrawn from the market, while the two-year average fixed rate crossed the six percent threshold again this week (last time after the Trus government’s mini-budget sparked market turmoil).
On the other hand, rents in London now cost almost 80 per cent of the average take-home pay, according to the latest figures from Homelet.
I can’t help you get the cash you need to buy your first London home (the average deposit is £67,800), but I can help you navigate this confusing time.
Should I buy now?
If you are currently renting in London and are lucky enough to have a decent salary and a decent amount of money saved, should you buy now? Or with mortgage rates going up and home prices plummeting this year, could you end up regretting it?
Ultimately, it’s always up to the individual to decide on their situation and risk appetite, but if I were in this position, I’d be tempted to try to buy, if only because the real heat is in the rental market right now. .
Median rents reach a new record of £2,210pcm and you will face some serious competition for every home.
Yesterday I was talking to a couple who had to move twice from a rental they had only been in for six months because the landlord was selling. This will only get more turbulent over the next year.
I have always believed that it is better to pay the mortgage than to pay the rent and pay someone else’s mortgage. If you have a steady job, reliable income, and a good deposit, I’d say go for it. It’s a buyer’s market, so if you can find what you’re looking for, bargain hard.
Will house prices fall?
The housing market is cyclical. There are some undeniable threats with the cost of living and interest rates putting downward pressure on the market.
Savills and Knight Frank predict declines in London house prices this year and next. But both estate agents expect things to start picking up again (as estate agents always do!) by 2025 and predict that the capital will enter the next phase of the market cycle in 2027 looking strong.
All of this is to say that it’s unlikely to matter if the price of your house drops a few percent in the next 12 to 24 months, although I understand that’s not a pleasant feeling. The reverse also applies, if the value of your property goes up by five percent, it’s irrelevant unless you want to sell. And when you sell in five years or more, you should have paid off part of your mortgage.
If you’re waiting for home prices to drop further before you buy, keep in mind that trying to time the bottom of the market is extremely difficult and you could easily end up missing your momentum.
Buy when you can, and buy a house that you think you could happily stay in for at least five years and should escape the worst market fluctuations.
How to choose a property: is the location still the queen?
I don’t think there is a first-time buyer on the ground who buys exactly what they want where they want it; that has always been the case, it is not a particular facet of the current market. It is a first purchase, not a forever purchase. Therefore, he must accept that he will probably compromise and move from where he is renting, which is difficult if he loves the area.
Considering what is going on in the world and the continued uncertainty, I would be cautious and choose the house that suits you the longest – longevity will be the secret here for no regrets. That may well mean you change the location to get more space.
I was recently talking with a couple who lived in a three-bedroom house with two children. That was fine, everything worked. And then her job changed to working permanently from home. And the house was no longer suitable, there was nowhere to work. You want to avoid being forced to sell at a time you don’t choose, so opt for a property that can be flexible and fit your life.
Features to consider
As life unfolds, you begin to change your uses. Can the property allow that to happen? Can you move hallways, can you change walls? Can you add value and space, for example, via an extension?
If a building is on the list, you will have fewer options. If it’s a lease, you’ll also need to ask your landlord for permission to make any structural changes.
You can find out what is likely to be possible as soon as you have seen a home that interests you by download a property report from Move iQ for £17.
This is a 45 page report for a specific ZIP code where you can find everything you need to know about that property, including what planning permission has been granted or denied on neighboring properties.
So if you think you might like to do a loft extension in the future, you can see if it’s likely to be possible and you can bid with more confidence.
Where to buy?
If your budget is strictly ‘forward-thinking’, as I would imagine many of London’s first-time buyers are, then it’s worth looking into areas that have a lot of investment and change on the horizon. We’re talking long term here, so you may have to ride a flat white for a few years.
Big developers have big departments that research areas to invest in and build on. It might not be a bad plan to take advantage of that and buy something nearby, because local facilities are likely to improve.
You shouldn’t think you’ve missed the boat if you only move once an area’s regeneration is underway. Usually there is a price increase when a new scheme is announced and another when construction begins and the change becomes visible. But the biggest spike is when something is built and people start living there.
Crossrail neighbourhoods, including Ealing Broadway and Woolwich they were among the highest gainers (9 per cent and 5 per cent respectively) in London last year since the Elizabeth line opened.
life is for living
I will end with some personal advice. For me, the most important thing to remember is that it all depends on the circumstances of your life.
Assuming your finances are up to scratch (and I appreciate that for many people this is always the biggest hurdle) and you want to move cities, change jobs, or your kids want to change schools, or whatever reason you have for wanting to move — then that’s the time to do it. It’s what I’ve always done in my own life.
Sure, timing the market is wonderful, but life is for living, and the odd percentage in home prices is just one component in the grand scheme of things.
For more information on Phil Spencer’s property report, head over to moveiq.es
https://www.standard.co.uk/homesandproperty/buying-mortgages/buying-in-london-phil-spencer-tips-firsttime-buyers-mortgages-renting-b1089104.html
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