There has been quite a lot of recent media comment about what is happening to the residential property market and some commentators have suggested that prices are on the rise.
This has led to speculation that potential sellers might hold their properties back from the market in the expectation that they will get a better price at some time in the future.
It’s an understandable reaction, but does it make good financial sense?
The pages of the national press feed the nation’s obsession with property prices and the slightest hiccup in the Indexes published by lenders and government departments brings on a frenzy of debate about how the market will react.
The percentage changes in house prices are usually tiny - perhaps 0.1 per cent in a month. At a flat rate it would take ten months for a full 1 per cent rise in prices.
Take the average house price of £160,000. A one per cent flat rate increase amounts to just £1,600. Money is money but do you think you would really find it beneficial to put your life on hold - waiting for 10 months to possibly achieve another £1,600?
Also remember that, if you are buying on, the property you want to purchase will probably have gone up in price by the same percentage. You could gain on the swings and lose on the roundabouts.
So unless prices are leaping up and double-digit inflation is a reality, there is no good financial reason to delay selling or buying in the hope you’ll somehow come out of a deal better off.
And there is no sign of prices leaping in any direction any time soon. The biggest brake on the housing market is still the relatively restricted levels of mortgage lending. Money is available for up to 95 per cent loans but only to those with good credit history, and at the first time buyer level the need to save a 5 per cent deposit is still a tough requirement.
At Harrison Murray we can help first time buyers by introducing them to independent financial advisers who can search the whole of the lending market for the very best deals and enable them to get their feet on the housing ladder.
And if they can buy your home, you can move on to your next property – without waiting to see which way prices go.