Property Insider’s Slightly Unorthodox But Ultimately Sensible Advice for First Time BuyersGeneral
Buying property for the first time can be a daunting experience. Here’s some advice for first time buyers on surviving and succeeding in the property market that you probably won’t read anywhere else:
* Don’t believe everything you read. Shock horror stories such as ‘Average property price now £300,000’, ‘Prices rise 10% this year’, ‘First time buyers average age now 45’ and so on are, at best, misleading and at worst simply not true.
The fact is, first time buyers are finding properties they can afford and are buying now. History tends to show it never gets any easier or cheaper to buy a house. So, if you want to buy and can afford it, there’s nothing to be lost by looking now.
* Forget the concept of jumping on the housing ladder – it pretty much doesn’t exist anymore anyway. Yes, it worked in the 80s and 90s when buying a house, living there for a few years, then selling and moving on up was easy and cheap. In today’s fractured housing market, however, it doesn’t work so easily.
So what’s the solution for first time buyers? Quite simply, it can pay to get as high up the market as you can now, saving yourself lots of work, hassle and expense in the future.
* Sorry guys …. but boring is usually best. As a first time buyer your priorities might be lifestyle-driven, for example, to find a cosy nest or a swish pad. But if you’re going to succeed in the market your priorities ought to be driven by practicality. The really important things when buying a home are: Location, space and potential.
Location …. well located homes are easier to live with, easier to resell and gain value most. Space …. having plenty of space gives you more options, and future proofs your needs. Potential …. a property with potential to refurbish or extend will generally always be a better buy.
Try to think long term too. Property is a long term purchase, usually paid for over 25 years. So, although it seems a long way off (it isn’t, really!) think about where you might be in 25 years.
* Your perfect house DOES NOT EXIST. Not here, not there, not anywhere! So although it is important to have a clear idea of what you want, remember – you probably aren’t going to find it. Make a list of what you want in a house – houses that tick at least half of those boxes might be a compromise but are well worth considering.
If you’re buying with a spouse or partner recognise that finding a house that suits one person’s requirements is hard – finding one to suit two is almost impossible. Before you start looking sit down and make a list that both of you can agree on.
* Think big. It usually pays to buy the biggest house you can, and the most expensive you can sensibly afford. There are a few good reasons why: Bigger houses usually offer better value for money than smaller homes, and you won’t be in competition with other first time buyers and buy to let landlords. You stand to gain more from any future property price rises. Again it’s also a good way of future proofing – you won’t need to move as much with all the hassle and expense that involves.
* Be market savvy. Get to know the property market in the area you want to buy in inside out. Find out how long houses take to sell. Find out how much under the asking price they typically sell for, or how much above. Why? This way, you’ll know whether you need to move quickly with a competitive offer – or can take your time with a cheeky low bid.
Give your local estate agents some love! Everybody likes to name call estate agents but, generally, they know their local market inside out and can give you sound advice on what it’s doing.
* It’s good to share. Finance is tight for most first time buyers ….. so consider smart ways of boosting your budget. Scrimping and saving and working extra hours aren’t much fun and won’t increase your budget that much. But here’s an idea that’s well worth considering: Rent a room or rooms to friends or lodgers. In most areas there’s a good demand for rooms and renting a couple of rooms could cover most of your mortgage repayments each month for absolutely no extra work.
* Know when to make a silly offer and when it’s just that …. silly. People might tell you that because you don’t have a property to sell you’re in a great position to get a deal. While that’s true to some extent it only works if the seller wants to sell and move quickly and will compromise on the price they want to achieve it. In a buoyant market or in the case of a sought after property it doesn’t always work, and will probably mean you’ll miss out on the houses you want.
If you want a deal only consider properties where there is a deal to be had.
* This is probably the best single piece of advice ever: By finding the best mortgage you can afford a better property AND pay less for it too.
Shop around, do your research and take good INDEPENDENT ADVICE before signing up for a mortgage. The big banks and building societies are masters at seducing customers with glitzy, lifestyle advertising liberally sprinkled with the cosy bottles of wine and fun parties that home ownership is supposedly all about. But the mortgage that is promoted and presented the best may not actually be the best. (And being perfectly frank now, probably isn’t)
Be aware that there can be a massive difference in the cost of different mortgages depending on the terms and interest rate, even where the sum borrowed is the same. The fact is, finding the right finance is actually more important than finding the right house.
We hope you’ve found these tips and advice helpful. For more useful articles and reports on surviving and thriving in today’s property market keep checking back with Property Insider.