publication date: May 9, 2011
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
When is the right time to buy a home?
If you ask most people when they'd ideally like to buy a home, almost all will first respond with ‘when I can get a bargain' and to answer this question quickly, bargains are available when the property surveys are reporting, along with the media, when the market isn't performing well and prices are falling.
Having monitored property prices closely for over ten years and particularly since the credit crunch, Kate Faulkner shows that one of the best times to buy a property is when the media headlines are reporting ‘property prices are falling'. "As soon as the BBC and newspaper headlines lead with this title, property prices automatically fall in the following few months" says Kate. "What happens is when the media says national prices are falling, whatever is happening at a local level, buyers tend to hold off making an offer, meaning sellers who need to sell then reduce their prices to secure a sale and low and behold, the next lot of surveys the media reports show prices falling". According to Kate, this carries on for a round three to four months after the first ‘doom and gloom' reports are published.
Buying at the right time can also depend on what you are buying. Because the 2007 crash hit very quickly after Northern Rock collapsed, developers had already started to build too many properties and knew that they needed to get shot of them by Xmas 2007 or they'd struggle to sell during 2008. The result was that since the credit crunch the best new build bargains already appear to have been had between October and December 2007, since this time new build prices have stabilised in most areas and even in some areas slightly increased.
For a real ‘buyers bargain' says Kate, repossessions need to be on the rise so much so that lenders send them to the auction houses. Unlike new builds which gave their best bargains at the end of 2007, repossessions were at their height during the latter part of 2008. Since this time interest rates dropped dramatically, allowing a lot more people to stay in their homes than would have been able to if rates had stayed at five percent.
The problem for buyers though is that whether you buy or not and when is the right time for you, depends on two things. Firstly whether there is a rising or falling market in your area and secondly, your personal circumstances.
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