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To buy or not to buy, is the question on many people’s minds. Estate agents have reported an increase in enquiries and while these have yet to convert to sales, signs suggest interest is growing. To help you decided, we give you our top ten tips for house buyers. More...
1) Know that you aren’t the only to be dipping their toe in the water. The Royal Institution of Chartered Surveyors (RICS) has said that the amount of people making property enquiries is at the highest since August 2006. The estate agent Hamptons International say there are around ten potential buyers for every new property, which marks an increase of 17.5% from this time last year.
2) Second in our list of top ten tips for house buyers is about borrowing. The low cost in borrowing has been one factor behind the recent pick up in the property market. Another has been the devaluing of the pound which has attracted some buyers from overseas. For instance, London property is now much sought after by Japanese investors who are paying up to 50% less for a home in the capital. Investors form Europe and Hong Kong are able to purchase a piece of London property for almost 40% less.
3) The market has already bottomed out, is the message from many estate agents, including Hampton International. It would, however, be premature to call it a complete recovery as some areas across the country still have properties losing value. London is undoubtedly beginning to pick up again, which can be expected to spread across the whole of Britain in the coming years.
4) The optimistic viewpoint is not one shared by everyone. Some research consultancies, such as Capital Economics says that low sales figures and falling prices paint a more accurate picture of what is happening in most areas of the country. It is also a view shared by the Council of Mortgage Lenders that has repeatedly said home loans are continuing to decline and that signs of a recovery are just isolated incidents.
Grimly, the Council of Economics, a research institute predicts prices to drop 20% this year and 10% in 2010.
5) Would be buyers may get a bargain according to latest figures which say property is selling for around 85% below asking price. However, don’t expect to be spoilt for choice as trends are keeping most sellers out of the market place altogether.
According to the Royal Institute of Chartered Surveyors, the average amount of properties on estate agents’ portfolios is seventy, down 25% from last year.
6) Getting a mortgage is tough and you can forget about it unless you have a substantial deposit between 15-20% and a top-notch credit rating. To grab a real bargain and take advantage of the best deals out there you will need to find a deposit of around 24-40%.
7) If you have accumulated some wealth and are itching to snap up a good investment then consider visiting a property auction. Prices at auction are typically 20-30% below estate agents’ prices and can be the result of repossession. In fact, around 25% of properties at auction are repossession cases where the bank wants nothing more than a quick sale.
Savers are now taking their money out of deposit accounts and buying property, which is proving a better investment than what savings currently represent – sometimes achieving yields of 8%.
8) The economic crisis has hit the property market hard and new-build properties in particularly have been badly affected. In the last year, 8,000 properties have been sold at auction of which 15 % were new-builds. Typically, those repossessed new builds have been city centre apartments owned by investors.
People are not so willing to buy off-plan anymore but instead prefer buy-to-let properties, which can earn around 7% from sitting tenants.
9) Developers are currently fighting to stay afloat and the economic climate has forced them into negotiations they would previously have never considered. New homes can be bought for around 10% off the initial asking price.
10) Housing associations are buying large amounts of properties from developers and offering them to first-time buyers as part of shared ownership schemes. Developers are selling properties for a little lower than the intended asking price in a bid to stop the rot and get homes off their books.
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