Property solicitor Celia Perry
In these uncertain times we are often asked by clients, particularly those who are buying property for the first time, whether they should buy now or whether it would be better to wait.
We get it, the headlines are scary, predicting falling property prices and increasing mortgage rates. So what should buyers do?
It depends on buyers’ individual circumstances and appetite for risk. In our work we have seen families combining forces via multigenerational living, with couples agreeing for a parent to move in and acquire a share in the home in return for perhaps paying off the mortgage or building a self-contained annexe.
Take an example of potential buyers who are in rented accommodation. The headlines tell us that the rental market is very turbulent at the moment and that this is only likely to get worse as landlords sell their rental properties and those landlords who are still renting property out face their own higher mortgage interest rates so will be looking to increase rents on new lettings. There is no guarantee that a landlord will renew a tenancy when it ends or if they are prepared to renew it what the rent will be on renewal.
A property purchase is a long-term investment and most people are buying not simply bricks and mortar but a home where they will live and possibly bring up a family for a number of years. Yes, it is unnerving to think that the home you are about to buy may be worth less in a year’s time than the price you are paying for it, but overall, the property market is cyclical. Why be paying off your landlord’s mortgage when you could be paying off your own?
If you have a reasonable income, are in a secure job and take out a fixed rate mortgage for a sensible term so that you know what your outgoing on the mortgage will be for the next two to five years, buy a home now that you will feel comfortable living in for the next five to ten years and you should insulate yourself against the worst of the fluctuations in the market.
The temptation is to wait until you think the market has bottomed out, but you could very easily end up missing that magic moment which is notoriously hard to predict - even the industry experts frequently get it wrong.
We wish we had all the answers to this dilemma, but we would be lying if we said we did. It is great if you can hit the market at the absolute sweet spot, but when it comes down to it, life is for the living. So if you are buying a property you like and can live in, then without being blasé about it, a percentage point or two decrease in property prices is only one small part of living and a much smaller part of the bigger picture.
Julie West Solicitors is able to assist with residential and commercial property work including:
And more besides
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