Five tips for buyers in the current property market
Turn on the news these days and it all seems to be doom and gloom. Brexit, COVID, the Ukraine War, and many other factors are leaving us in what appears to be a downward spiral.
But, as our ancestors did not too long ago, it’s all about keeping calm and carrying on. Although it might be difficult in the near future, this time will pass.
This article contains some basic advice for property buyers in the current market. In short, it’s all about thinking ahead and preparing for the harder times, so you don’t get caught out.
Rising interest rates
Rising interest rates is the first major thing to consider. If you were to look for a new mortgage application today with a 10% deposit, you’d struggle to find anything below 5.5%.
This will mean your monthly payments are much higher than what most people who took out a mortgage two years ago are paying. The playing field will eventually level once current owners’ fixed rates expire, of course.
It’s worth preparing for the worst. Estimates suggest mortgage rates could reach at least 6.5% by the middle of next year, and they’re likely to keep going up as we face a recession.
The best thing you can do is explore long-term fixed-rate mortgages. They may cost more up front, unfortunately, but you may save tens of thousands in the long run.
Energy costs
The energy crisis is primarily driven by the Ukraine War. The invasion of Ukraine and sanctions on Russia and Russian businesspeople have sent oil prices through the roof. Although it’s plateaued since July, the unpredictable nature of the war and its repercussion means anything could happen. Numerous other reasons mean our electricity bills are now… well, a little high.
Most households have seen their energy expenditure double or triple over the last year. The energy price cap will increase yet again in April 2023, adding even more costs to the average homeowner.
When buying a new home, you must focus on energy efficiency. The lower your monthly running costs, the better position you’ll be in. This means newer buildings in the suburbs are likely to sell well.
The following will be hugely important over the coming months and years. If a home you buy doesn’t have them, they’re well worth installing as soon as possible.
- Double-glazed windows
- Solar panels
- LEDs
- Modern insulation
At the same time, avoid using costly appliances such as tumble dryers. Line dry and use racks instead. Read more about energy-saving tips from the Energy Saving Trust.
The ongoing cost of living crisis
The cost of living crisis is alive and well. As if it wasn’t bad enough that fuel and energy are much more expensive, we’re also having to deal with price jumps in food, vehicles, transportation, and general day-to-day necessities. While these are important to factor into your budget so you know you can afford repayments, most don’t directly affect your household payments. There are a couple of exceptions, of course:
- Choose the size of your fridge/freezer and cooking appliances carefully.
- Air fryers are a cheap, smaller alternative at the moment, for example.
- Be sure to keep on top of all the food you buy – this isn’t the time to let things go off.
- Electric cars will now cost significantly more to charge.
A looming recession
The Bank of England predicts that the looming recession will be the longest for over 100 years. It’s expected to last well into 2024. Thankfully, the overall GDP drop shouldn’t be quite so severe as the 2008 Financial Crisis.
We’ll see inflation continue to rise over the next year, affecting all aspects of daily life. Being prepared is crucial. In general, a recession makes things nervy for homeowners. Before you commit to purchasing a property, make sure you explore all your mortgage options and get a home survey to make sure you’re paying a fair price. It’s also important to have savings in case your career is affected.
Home maintenance costs
A last significant factor for buyers is general home maintenance costs. Before you buy a new house, you should know exactly what you’ll need to spend on it in the long term. For example, consider the following:
- What’s the average monthly energy (and other utilities) consumption?
- How much time and product will it take to clean?
- Are there any extra ongoing costs (for example, septic, LPG, water softener salt, etc.)?
- Will you get a window cleaner?
- What are the rates (Council Tax, etc.)?
- How much effort, time and money will the grounds take up?
- What problems need fixing with the home before you even move in?
- And so on.
Can GB Home Surveys help you?
GB Home Surveys is a business offering RICS home surveys to homebuyers in the South West, West Midlands and South Wales. We have offices spread throughout Three Counties, Bristol and Bath, Devon, Taunton and North Somerset and the Cotswolds, as well as Cardiff and the West Midlands.
A home survey is vital before buying a new home, especially in the current climate.
If you’re interested to learn more, feel free to contact us using the form below. We’re always happy to have an obligation-free, friendly chat. We’re excited to help you on your journey in these trying times.
