The rise and rise of the housing market
January, traditionally a quieter month in the world of moving home, has been full steam ahead, with hardly time to draw breath. That’s the way we like it at Phillips George. So now is a good time to take a look at the market and what to expect in 2022.
While house prices have grown by around 14% in total over the last few years, and the local property demand in the Leicester area continues to fuel premium prices, the prospect of interest rate hikes should be considered when buying your new home. Inflation has hit levels not seen for many years and at 5.4% this figure hides the real rises in the cost of living, which for many is much higher for essential household goods and utilities.
These worrying cost of living figures are compounded by the energy crisis which will see capped rates disappear before April and price rises for gas, electricity and fuel. Some experts are predicting 50% rises in energy costs. If you have not already been hit by rises you soon will be.
What can you do to mitigate the effects of these pressures when you are buying and selling property?
- Get the best mortgage advice you can. As interest rates are expected to rise this year, look out for good capped or fixed rate mortgages. We recommend you seek advice from truly independent sources.
- Do the maths. Work out your household budget to make sure you can afford the commitment you will be making, considering the expected rises in inflation and energy bills.
- Selling your home in this hot housing market will get you the best price on your home. Now is still a good time to buy and sell, but understand that there is a lot of competition out there for good quality housing, so find the estate agent who understands the market and can help maximise the value of the property you are selling.
New to the market?
As often seems to be the case, this rapidly changing environment seems to hit the first-time buyers’ market hardest. But if you are buying for the first time, don’t be disheartened. It may be difficult getting on the ladder, but it is worth it. Once you are on, time is your friend, and although you should never think of your home simply as an investment, being a homeowner pays dividends.
Clare Phillips, Partner at Phillips George offers this gem of advice; “As a first-time buyer it is best to look at your first house as a stepping stone. It is rarely going to be your forever home, but look for what the property provides for you, rather than what it lacks. Your first home may not have a swimming pool, but maybe that is not needed.”
“I recommend you try to be as practical as possible when you are looking at a house purchase. How much will it cost to live in your new home? Is the home energy efficient and well insulated? Is the heating system fit for purpose? Work out your monthly costs of living, considering your mortgage, Council Tax and heating costs. Set this against the benefits that first-time buyers enjoy, including stamp duty relief for properties up to £300,000.”
“The message in this changing market is the same for all – be realistic and don’t over-stretch yourself. The ghost of negative equity still haunts a high inflation economy.”