STICK OR TWIST ?
BY CHRISTIAN COVENTRY , CONCEPT MORTGAGES
“ I am sick of renting ; it ’ s just dead money isn ’ t it !” is a phrase I have heard from First Time Buyers quite literally hundreds of times . In the most part this is true , however , this can also depend on which way the housing market is travelling .
If you purchase a property just before house prices dip then it could be argued you may have been better off hanging on in rented accommodation while house prices slide , especially if they fall at a rate quicker than you can repay capital on your mortgage . And remember , when you are paying your mortgage a good chunk of your monthly payment is interest , with only a small proportion of capital repaid in the early years of a typical twenty-five year loan .
You may be wondering why I am talking about this at a time when the housing market has never been so buoyant , with a reported dozen buyers for every property for sale . Well , this week was a new record at Concept Mortgages in that we had five separate buyers all with their intended purchase ‘ down valued ’ by their lender . Yes , five in as many days !
A down-valuation is when a Lender ’ s Surveyor has been unable to provide sufficient comparable evidence to support an agreed sale price . This is a quite startling statistic and would only ever happen in a market that is over-heating and believe me when I tell you that the current housing market is most definitely overheating .
Confidence amongst buyers is at an all-time high , the Government has done its upmost to support the housing market and new working patterns brought about by the pandemic have all helped turbo-charge the current demand . work , pushing buyers further into the suburbs , with gardens taking on a greater importance than ever before .
Spreading work files over the dining room table is just not cutting it for many and the desire to have a home office has pushed swathes of frustrated home workers to call in the Estate Agents .
City dwellers are also seeking out second homes and holiday rentals , which is demonstrated by the fact we are currently helping buyers purchase in Anglesey , The Isle-of-Wight , Cornwall , Cumbria and Abersoch . All ‘ staycation ’ hot spots .
The feel-good factor seems to be sweeping across the country , helped of course by the vaccine juggernaut which so far seems to be helping to keep infection rates low . If we add in a summer of spending with pubs , restaurants and retail shops all predicting a sales bonanza then it is likely the expected economic bounce will fuel the housing market further still .
It is not until the Government takes our economy off the furlough life support machine that we will really know if it can be discharged from intensive care to stand on its own two feet . The future prosperity of our housing market will also depend on how well it stands up once it has been discharged .
Our housing market is like the changing of the season and the tides of the sea and yes , I did steal that from Only Fool and Horses ! A sellers ’ market will always run its course and be followed with a buyers ’ market and the intervening period will no doubt see a house price correction . The trick of course is in knowing when this is going to happen .
Our new work from home culture has made many people question whether they need to live as close to their place of
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