Robert Williams Estate Agents, Exeter
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A. I understand your reasoning. After all, if the place you are renting suits your needs, why risk your savings on a home that may drop in value?
No-one can predict what the property market will do tomorrow, next week or next month. However, in the long term, property is always a good, solid investment.
Take a look at the attached graph - the latest UK House Price Index produced by Land Registry, which shows the average UK house price from January 05 to May 23. Indeed, the average price fell for the six months after its peak of £292,555 in September 22. However, this was in relatively small increments and the last couple of months have seen an upward turn.
More poignantly, you’ll notice that over the 18 years shown on the graph, every ‘blip’ is followed by a more significant upward swing, culminating in the value of property over the period increasing by almost 90%, from £150,663 in January 05 to £285,861 in May 23.
What is slightly more concerning however, is the increased cost of borrowing. Fact is, the base rate of interest had to rise to control inflation, which has been falling since its peak of just over 11% in October, to 7.95% in June, and mortgage lenders had to follow suit.
The current view among experts is that rates will have to go slightly higher in the short term (as demonstrated yesterday) but are then expected to lower. This has sparked debate among buyers, whether to opt for short- or long-term fixed mortgage deals.
I suggest you ask yourselves two questions:
1) are you both in secure employment? and
2) are you prepared to make a long-term commitment to your home?
If you can say ‘yes’ to both questions, then my advice is, go ahead and buy. After all, you’re in an extremely strong position.
However, be careful. Choose a property flexible enough to accommodate your future. Speak to a reputable IFA, who can find the best mortgage deal for your circumstances, and don’t overstretch yourselves.
We can help you to find a property and our financial advisor, Emma Hayes, will be able to guide you through the mortgage market. Give us a call on 01392 204800.
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