I’ve been saying it for a while: Now is, without doubt, the best time to buy a property in the 20 years I’ve been doing this job.
4 years ago getting hold of a house round here was a deeply challenging experience. You had to call within an hour of it going live online to make sure you were in the first 30 requests, view it within the first week at the exact time the agent stipulated, for a maximum of 15 minutes, and then make an offer the next day. If you didn’t comply with any of these you’d miss out to someone hungrier than you. Such was the flurried panic you didn’t have time to worry about minor details like whether you actually wanted it, all you knew was that if you didn’t buy this one, the next one would be £20k more. You just had to buy something. Anything.
Not so today. Today you can view something, think about it properly, view it again, ask pertinent questions and wait for the answers, look at what else has sold around to make sure the asking price is fair. Then make a carefully considered offer. If the seller doesn’t want to take the offer you can walk away and wait for something else. It’s altogether a more comfortable process.
So make the most of it. Because it won’t last.
In the last 4 years we’ve seen selling prices stabilise and rental prices rise. As the rush to buy subsides people are happy to rent for longer, comfortable that selling prices aren’t rising and they therefore aren’t falling thousands behind the market every month. Lovely.
Except that it’s not really very lovely renting a property in the UK. A big worry is that you have the lack of certainty of tenure that our rental laws bring, meaning you might have to pack up and ship out at fairly short notice, but it also costs you money every month. Take an average £400,000 3 bed semi here in the people’s republic of Trumpington. A 90% mortgage of £360,000 can be had for around 1.8% at the moment, which is an interest payment of £540 per month. The same house to rent is about £1400 per month. So if you’ve been renting that house since June 2016, waiting and watching and carefully considering whether to buy something now, you could have been paying £860 a month off your mortgage instead of to your landlord. That’s £10,320 a year. Making, at the time of writing, a total of £34,400. Which is a lot. (It’s actually more than that, as you pay off the mortgage the interest drops, but the sums are too hard for this estate agent to work out.)
As more and more people spend longer and longer renting, more and more will get to the point where these calculations trouble them. And more and more will get to the point where the need to feel completely settled overtakes any concerns over the housing market. We’re now three-and-a-half years post-referendum, remember, so there are people out there who were just a couple in June 2016 that are now a couple with 2 children. Life moves pretty fast, even if Brexit doesn’t.
Housing market slow downs happen regularly and what usually happens afterwards is a sudden, sharp rise as all of the pent-up demand comes bursting out. When it does there’s every chance it will be just as competitive as it was 4 years ago, maybe even more so. We’ve not seen job numbers in Cambridge shrink, quite the opposite, nor has the volume of available housing increased by a significant factor. So the supply and demand balance hasn’t changed, nor have interest rates. What’s changed is confidence and confidence will return, one day, possibly very soon. All you need to do is work out what day that will be and make sure you buy a house the day before.
Don’t say I didn’t warn you.