Q. It’s a new year and as such I have finally got myself into gear after watching the property market for the last 12 months I’ve decided it’s time to finally stop throwing my money away renting and buy somewhere. Having had a quick look around at what’s currently available and registered with some agents in my desired area it appears that the market has gone berserk?! Everything I want to view has gone already and for more than the asking price? What is going on and what can I do to ensure I find something and secure it with all the competition around from other buyers?
A. First of congratulations on taking the leap of faith and deciding to buy, as you accurately said renting is definitely throwing your money away and with interest rates still this low I’d certainly advise anyone to buy if they can. The bad news is – it’s a seller’s market! Prices have continued to rise since last July at a fierce rate and are still continuing to do so and at the moment I cannot see any let up for at least another 6 months for lots of reasons. The Help to Buy Scheme has definitely enticed a lot of people into the marketplace and also confidence has returned to the market once again and of course better lending deals and the bank of England low interest rates all adds up to a buoyant property market. It’s not going to be an easy task by any means given the current climate but there are definitely things that you can do to place yourself into a favourable position to secure your desired property. Firstly ensure you have already seen a mortgage advisor to discover how much you can afford to spend, they will then issue you with an AIP (Agreement in Principle) this proves that you are financially able to pay for the mortgage. When it comes to the crunch and you make an offer if you can also provide an AIP this will immediately take you up a couple of notches on a buyer who does not provide this. Reckless offers are prevalent in this kind of climate as buyers get so scared of losing a property they just make an offer regardless of whether they have checked out affordability, and hence many sales fall through when a week or so later it appears they cannot get the finance. Secondly, make friends with your local agents; you need them to remember you when a new instruction hits the market. And thirdly be prepared to pay the asking price or even a bit more, in this market no seller will look at an offer and its likely they will want to push for a sealed bids situation if there is more than one buyer interested. Ultimately you need to be prepared to expect the unexpected but if you follow my advice you should be well on the way to securing your first home.