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When is the right time to buy?

13 June 2011


When Is The Right Time to Buy?
We continue to live in strange times in relation to the economy but still we are a country that wishes to own its own home. The question at the moment is when is the right time to buy? There are a multitude of responses possible to this but there is no definitive answer apart from when you feel it is right for your situation.
There are a number of key drivers that could influence your decision. These include house price changes, job security and mortgage finance. We will aim to look at all of these to clear the confusion and potential myths surrounding them.
House Price Changes
There is plenty of data available on a monthly basis from a number or sources providing a snap shot of the current market and invariably they are all different. Also they are normally national or regional averages so are not particularly accurate for all types of property. The key to any decision is to undertake your own homework within the area that you are looking to buy in. Talk to local estate agents about what has been happening in their area and with the type of property you are looking to buy.
It is understandable that people may be worried about house price falls in the next few years. Again the market commentators are divided in their views although a partial consensus seems to be that prices will in general be fairly flat. As yourself how long do you expect to be in this property? In the short term we may have to reconcile ourselves with buying a property to live in and not necessarily to make money from. This I suppose is the same as most other purchases. We buy a car expecting it to be worth less from day one so why not houses. Houses may move more towards being a comsumerable item albeit one that is very expensive.
Job Security
Has unemployment peaked? Some say yes especially in the private sector. We are though currently in the midst of Local Authority’s re-cutting their budgets which will cause further job losses. Many economists are predicting that a large proportion of these losses will be taken up with growth in the private sector. We will have to wait and see.
You will know not only how stable your job is but also the opportunities within your industry. Also are your skills transferable? If so you will have greater opportunities to find future work.
Mortgage Finance
The last few years has seen mortgage finance become strangled by lender instability and  reluctance to lend. This is beginning to change with lenders beginning to offer more products and loan to values are moving slightly higher. It is though a fact of life that finance will be more expensive than previously and we will all have to put down higher deposits on our property.
Lenders are looking for stability of an applicant and they are still cherry picking but finance is becoming slightly easier to obtain. It is always worth obtaining independent advice from a mortgage broker who will be able to guide you through the lending maze.
Overall there will be many people still looking to move and buy property. The £1m question is when is best? The honest answer is when you want to and you know you can afford too. Do not try to second guess the housing market because you will never know if you are right until much later and then you could have missed the house of your dreams.
Lack of properties on the market is still an issue though but that is another blog altogether.
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