Earlier this month, house prices increased for the seventh consecutive time, while interest rates went up for the fifth time in June, and are expected to continue rising in coming months.
In one of the toughest socio-economic periods and markets of British modern history, property concierge platform, Moveable, has created the following useful guide to help struggling buyers navigate the peaks and troughs of the ever-changing trends of the UK's housing market.
How to Beat the Competition:
As a buyer in today’s market, competition is one of the main factors holding back prospective buyers from securing a home. Because of this, demonstrating how prepared you are when looking to buy a property, and being 'contract ready', will always be an attractive feature for sellers.
If you can approach the seller and validate that you have everything prepared – like having your mortgage agreed, conveyancer lined up, and if you’re selling a property, have that organised – it can make you a more attractive buyer.
Some sellers won’t mind knocking the price down if buyers come in being contract-ready. Many people are looking to sell their property as quickly as possible due to various financial reasons – especially in the current economic climate – so if you have everything ready, it may result in the option to negotiate a lower price.
A Guide to Conveyancing
Research from The Law Society reveals that over a third of home-movers have little knowledge when it comes to conveyancing, while one-in-four homebuyers are willing to pay more for a faster conveyancing experience due to lengthy delays. With a severe backlog within the process, homebuyers are still facing significant delays in this area.
It is important to ensure that you're well-prepared for this process - make sure you have money on account (around £400) before the conveyancing process begins, have proof of ID ready, check and provide your source of funds, remain proactive and communicate with your conveyancer, and don't forget to apply for buildings insurance.
Keep Your Eye Out for Regeneration Projects:
When looking for an area to buy in, be wary of any regeneration projects that are going on as a report from CBRE found that houses in these parts of the country enjoy almost five per cent above the average price growth.
This means that your home will likely grow in value after purchasing which could provide you with much-needed spending power when moving to your next and potentially bigger property. This also represents a significant opportunity for any budding developers who are looking to flip their first home for a profit.
Research shows that a staggering 24 per cent of millennials are looking to buy a home to develop, rather to live in, highlighting the desire among young Brits to capitalise on booming prices.
Shared Property Ownership
Surging house prices and the turbulent nature of the housing market have created shifts, with fractional ownership amongst friends and family serving as an innovative way of stepping onto the property ladder without breaking the bank.
A study from Moveable found that over one in 10 Brits are buying a home together with friends, siblings or family members, while a further 36 per cent of millennials are waiting to get into a partnership or marriage before purchasing their first home – because they simply can't afford it on their own.
Owning a property as beneficial joint tenants means that the property belongs to both owners jointly. The tenants must act together as a single owner for all transactions, including re-mortgaging and selling. As joint tenants, the owners do not own specific shares in the property and do not have the ability to give away a share of the home in a will. If either owner passes away, their interest in the property passes automatically to the other party.
You can also own the property as tenants in common, meaning that the property belongs to the owners jointly, but each owner also owns a specific share of its value. An owner can give away, sell, or mortgage their share, and if an owner dies, their share of the property passes to the beneficiary in their will.
Remortgaging to Release Equity:
A recent study found that one in five millennials are looking to re-mortgage their home in order to buy a second one. Rising house prices are welcome news for those looking to remortgage as their loan to value (LTV) percentage decreases, meaning they can get a much more competitive deal.
The number of borrowers using another stream of property income to pay off their mortgage almost doubled from 20 per cent in 2020 to 38 per cent last year, and those using it to pay off unsecured debt remained steady at around 27 per cent.
Simon Bath, property expert and CEO of iPlace Global, the creators of Moveable, said: "Prospective buyers must take the time to understand the different aspects of the property market in order to secure a home given the current climate.
"Having all your ducks in a row will ultimately save you from overpaying by thousands, gain a significant advantage over your competitors, and prevent any delays that may occur.
“Sellers will often choose a buyer that is ‘contract ready’, over and above someone who isn’t but is offering a higher purchase price. People should also ensure they’re on the lookout for up-and-coming areas, as this could provide an affordable purchase and mean your house significantly grows in value in the ensuing years”.