When it comes to buying a home, in my experience you should never rush and never, ever panic buy. If you are stretching yourself so much that you couldn’t afford a property in the area you want in the next few months, then it’s probably not a good idea to purchase
there in the first place.
| Owning a home is fantastic, especially if you get it in the location you really want. However even multi-millionaires have to compromise when they buy and can’t always buy what they want in the location they want. And for the 30,000 plus people who are currently being repossessed each year, I expect many had wished they had stayed off the ladder. | XXX |  |
It’s important to remember that although mortgage rates are low at the moment, the long term average since the millennium is around 5-6%. I remember in the 1990s when they hit 15%. Secondly, we still aren’t out of the woods yet economically, so we don’t know that the current recovery in the housing market will hold. And finally, on average, according to the Office of National Statistics, most people’s disposable income (the money you receive each month after tax) is still falling and certainly isn’t keeping up with inflation.
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XXX | If we should all have learnt something over the last few years, it’s that if buyers buy because of a fear of prices rising out of their reach, and lenders and valuers are daft enough to get caught up in the belief that property prices will always rise, all that happens is we create a housing bubble which has to burst at some stage. |
As much as estate agents are often blamed for rising house prices, it’s really buyers, lenders and surveyors that are responsible – with the blame in that order. I always find it interesting that we blame agents for prices going up, but never blame them when they go down – you can’t control one without being able to do the other!
| If we want prices to stay down, then all buyers need to do is stay at home and refuse to take part in sealed bids. Unfortunately though it’s unlikely this can be organised, the best thing to do if you are in an area where price rises seem to going up fast are:- | XXX |  |
1. Check the Land Registry Data to see what’s happened to house prices in your local authority. What was the height they reached in 2007? How low did they fall to, or are they still falling?
2. Is the price you are looking to offer for a property in line with what other buyers have paid in the past or will you be paying the highest price on the street or in the block?
3. If you can’t afford the mortgage over the next five or more years, could you rent out a room or even move out and let it and still be able to keep the home, just in case prices fall in the short term or you struggle to sell?
4. Is there somewhere a few streets nearby which is in a different postcode which hasn’t seen big rises yet, but they may come?
5. Make sure you double check with your lender what their standard variable rate is now and what you will have to pay at 6-7% mortgage rates?
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