Five questions buyers could mull over now England’s housing market has reopened
England’s housing market may be back in business – but some buyers may face “fresh agony” as they wonder if they should still go ahead with plans they had made before the lockdown.
Sarah Coles, a personal finance analyst at Hargreaves Lansdown, said: “Buying a property is immensely stressful at the best of times, so having the whole process frozen part of the way through has been excruciating. Even now the housing market has re-opened in England, there’s plenty of fresh agony to come.”
She said some people who had been about to make a purchase may be wondering what is going to happen to house prices – and whether that means they should still go ahead.
Ms Coles added: “However, there are five questions you can ask yourself, so you can be sure that whatever the outcome, you made the right decision for your own circumstances.”
Here are Ms Coles’s five questions for buyers to mull over:
1. Have I over-stretched myself – and therefore is this a good opportunity to avoid a mistake?
In a rising market, it is tempting to push your budget to the limit. If you felt under pressure to offer more than you could really afford, or if your circumstances have changed as a result of the crisis, the purchase may not make sense any more.
2. Would I rather live somewhere else – and does this give me the chance to do so?
Every house purchase is a compromise, but if you made compromises you will struggle to live with because you could not afford what you wanted, a falling market could push more attractive properties into your price range.
3. What is the cost of pulling out – and is it worth it?
If you have already exchanged contracts, the losses could be really substantial. Before you exchange, there could still be significant costs. If you have done searches and paid surveyors and lawyers, you could lose thousands of pounds. Even at the early stages, if you are a first-time buyer, this could end up costing you thousands of pounds more in rent if you go back to the drawing board. Before you make any decisions, calculate what you stand to lose.
4. Am I planning to be in the property for a while – in which case do price falls really matter?
It is only natural to worry about falling prices – and the risk that you will pay over the odds. However, this matters far more if it is somewhere you will be selling in a couple of years, so you end up with less than you started with – and even risk falling into negative equity. If you intend to live there for a reasonable period, there is every chance prices will have recovered when you come to sell.
5. Am I prepared to risk losing this property?
If you really want to buy the property, but you would like a price reduction to protect you from future price falls, you could consider contacting the seller through the estate agent and open negotiations. You may get a reduction of some kind.
But any time you try to negotiate, you need to be prepared for them to refuse and take their chances back on the market. If this is the home of your dreams, you need to be certain you are prepared to risk this.