If you are thinking of buying your first home, or moving for the 10th time! You’ll want to read this first and find out when is the best time to buy a house. It might not be what you expected!
Where are the first time buyers?
Interesting, there aren’t a huge number of first-time buyers in the market at the moment, and as a Mortgage Adviser, I find that crazy!
Because interest rates are ridiculously low and house prices are stable.
There are always going to be people looking to upsize, downsize, and move to new areas, but the first time buyer market is quiet.
I’m sure there is an element of uncertainty, but house prices are so robust, I wouldn’t even be worried about Brexit. Just look back to the 2008/2009 crash. Yes, house prices came down a bit, but not nearly as much as I thought they would or perhaps should!
One thing that experience has taught me is not to predict house prices. You'll almost always get it wrong.
Here’s one thing I am confident about…
House prices aren’t going to skyrocket anytime soon. Nor are they going to fall into a chasm!
Not because of the economy. As I said, I’ve stopped trying to predict — I’d rather deal with facts and what I see in the market — but because lending criteria is tighter than it’s ever been in the past.
Historically, anyone could borrow anything they wanted. Looking back, it was just crazy. It made it easy to buy, which increased demand, and created rampant house price inflation.
Now prices are somewhat restricted by the capacity of people to borrow money.
And this is critical for stable house price growth, as prices are in part linked to wage growth.
Of course, that’s not to say; there aren’t anomalies in terms of average earnings to average house prices! Figures can be skewed when you get people selling in more expensive areas and moving to cheaper ones!
First time buyers need to stop speculating!
As a result, the market is shifting away from everyone being a property speculator and making easy money (that’s not to say there aren’t still opportunities) to one that should be more stable.
So if you’re a first-time buyer or looking to move house, forget about predicting the market and waiting for the perfect time. You’ll get it wrong or just miss out!
If you need a new home and you have the money, go and buy one.
And if you aren’t sure what to do, go and ask a professional independent mortgage broker. They’ll advise and guide you.
First time buyers only fear being left behind!
What I find frustrating is that lots of first-time buyers try to time their first home purchase for when prices are rising. But when you think about it, this is crazy!
You should buy when things are either falling or flat. That’s when you get a great deal!
The reality is that the majority tend to buy when the market is rising. It’s the fear of being left behind, and the stories of their peers making easy money from house price inflation.
They see prices rising and hope their new purchase will increase in value quickly.
I get it!
That may or may not turn out to be accurate, but either way, it’s the wrong approach.
Why? Because there are many other factors to consider when buying a home. Interest rates, your finances, and finding the right property for you and your family.
And most importantly, you need to forget about the property being only an investment. Sure, it will probably still do well over a long time, but you need to think about your first home as precisely that — a home, not an investment.
Trying to chase the market often means neglecting these factors.
This is what you need to do to determine the best time to buy a home:
Purchase a property when you want a place of your own.
If you can also time it when house prices are stable, and interest rates are low, fantastic, but none of these should be your primary driver.
The most important thing is that you can afford the mortgage and you've planned for it correctly.
It’s that simple.
You don’t have to try and predict when prices are going to rise.
You don’t have to predict when interest rates will change. It’s all irrelevant.
If you can buy when interests rates are low, house prices are stable, and if you get a fixed-rate mortgage, then maybe right now is a perfect time.
If you have any questions, please do not hesitate to get in touch.