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First Time Buyers Watch the Market
With the property market still falling first time buyers should be watching the market closely. Here we look at what first time buyers should be looking for.
First time buyers have been priced out of the property market for a number of years. Now with house prices having fallen last year on average (and remember regions vary considerably) by 16% and the market still falling, first time buyers should be watching the market closely. To buy when the market reaches it's trough will be a lucky swoop. More likely, you will buy when the market is still falling or when it has started to rise and a race to snap a bargain may have started.
The earliest prediction for prices to reach the trough is in mid-2009 so this is your target date to know what you want and be a position to buy. Some predict that prices will reach the trough by the end of 2009 and then the market will recover in 2010/2011. No one knows when the market will bottom out but it's a good idea to be prepared and if you do find your perfect property but the market is still falling then you have the option to put in a very low offer. Sellers will accept a deal they are happy enough with.
Viewing property properly takes experience. First time buyers should begin now to look at property details and start viewing properties. You need to develop a keen eye and at the same time be able to relax in a property so that you can imagine yourself living there. The more properties you view, the better idea of your priorities for you and your family. Your priorities are likely to evolve as you view more properties.
Even though prices are thousands of pounds lower than at the property peak in 2007 buying a property will still be the biggest single investment you are likely to make in your life time. You need to get it right. You need to view a property as your home and it needs to match your lifestyle. If it doesn't match your lifestyle you are likely to get itchy feet soon after moving in and then you may want to move again resulting in more stress, more costs and general mayhem. You need to think it through and it's useful to have a rough plan of what you want from a property and when you want it. For example, ask yourself the following questions:
1. How long do we want to live in our new house?
2. How many people will be living in this property and where will they sleep (consider a growing family, elderly relatives or lodgers)?
3. Is there space for everyone to have enough of their own space (key for a growing family)
4. Do we need our own parking space(s)?
5. Would we be happy to have a property that needs work? Would we want to do the work ourselves or would we want to get tradesman in?
6. What sort of neighbourhood would we like to live in?
7. What do we need easy access to? What access is good enough?
8. What jobs are we expecting to do and can we reach them easily enough?
9. What's our dream home?
10. What's our budget!
Budget - there's a buzz word. Cash for mortgages are currently limited though they are still available. You need to focus on your loan-to-value ratio and try to save for a good deposit. Although there are 21 mortgages currently available if you have a 5% deposit you will you have to pay a higher interest rate. A deposit of 25% will get you a much better deal. The bottom line - keep saving. You'll need a deposit plus moving costs plus some initial settling in costs.
First time buyers will be glad they didn't buy in 2007. Maybe this year will be their year.
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