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Buying a Property in Today’s Market

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The news of late in terms of mortgage interest rates rising at an alarming speed is difficult to read, but there are still some positives for buyers in today’s market. We spoke to Phil Roberts, Tick Property Group’s new Sales Manager, to find out all you need to know.

Is now a good time to buy?

Phil was quick to point out that at this stage, there is a lot of guesswork involved when it comes to the property market: no-one knows exactly what will happen over the coming weeks and months, and how the issues may affect people is subjective. It does seem likely, however, that mortgage rates will continue to rise. If this is the case, then now is the right time to lock in a mortgage offer as your monthly repayments based on an offer received today will be much lower than on a mortgage offer received in even a few weeks. “This is counterbalanced,” adds Phil, “with the idea that house prices are expected to drop by as much as 10-15% over the course of the next 12 months.” In short, this means that whilst you may be paying a higher rate of interest on a mortgage, the house you choose to buy could be cheaper than it was at the height of the recent property boom. Similarly, if you’re looking to sell, you’d be best placed to do so now before the house prices begin to drop.

I’m a first-time buyer, will I struggle to get a mortgage?

Phil advises that, “yes, it is going to be more difficult to get a mortgage.” Mortgage offers are made by lenders after assessing affordability. As interest rates rise, so too do monthly repayments. If you’re looking to get a mortgage now, you’d be more likely to be accepted than when your affordability is assessed against the potentially higher rates expected to be introduced over the coming weeks. “It’s a double-edged sword,” says Phil, “but if you can get a mortgage, you’re going to get a better rate.”

My lender has pulled my mortgage offer, should I now wait to buy?

“Waiting to see what the market is going to do could be beneficial,” says Phil, “because prices are expected to drop by 10-15%. If you wait too long, you run the risk of increased interest rates.” If you’re an investor, however, rental prices are continuing to rise, and people who are not looking to buy – or who can’t get a mortgage – will continue to rent. Rental demand is extremely high and continues to grow. “So, if you’re an investor,” points out Phil, “now is a fantastic time to buy an investment property, as your rental yield will be increased.”

I’m an investor, where is a good location to buy?

It may look like a biased answer, but for Phil, Liverpool is the ideal location for an investment property. Liverpool is a thriving city, and “when you compare house prices against London’s, you’re going to get much more for your money, as well as a higher yield.”

What are your top 5 tips for buying today as an investor?

  1. Seek good advice from local property experts
  2. Set a realistic budget and stick to it
  3. Have an investment strategy
  4. Understand your tax obligations
  5. Understand your legal requirements

If you’re thinking of purchasing a property – either as a private buyer or an investor – remember that Tick Property Group are always on hand to provide the help and advise you need, so contact us today.

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