Hopeful first-time buyers — or those renting as a stopgap having already sold — may be observing falling UK house prices with glee as they plan to swoop in and bag a bargain. In fact, house prices are now rising more slowly than income. The latest Nationwide house price index revealed that annual house price growth in October was the lowest since May 2013.
Around 38% of properties for sale were reduced in price in October after being listed — an increase of 5.45% from April, according to Zoopla data. Many estate agents blame uncertainty of Brexit for the price reductions. The overvaluation of properties and the lack of affordability are also big problems.
How to find the best bargains
So what’s the best way to approach buying property in the current market? While it’s a buyers’ market, you still need to do some detective work to find the best bargains. The Zoopla research says the biggest discounts are to be found in Bradford, Mitcham (Surrey), Newcastle, Doncaster, Bolton and London – in that order. But that doesn’t mean there aren’t bargains elsewhere. Here’s what you need to know:
- Pay particular attention to where property has been on the market for some time. Getting the timing right can contribute to negotiating a good price. Those who didn’t manage to sell before the summer will be desperate to sell before the end of the year.
- Even in a buyers’ market it’s crucial to understand the background of a seller before making an offer on a property. Ask the agent if there have been any offers made, how quickly the sellers need to move and if they have an onward purchase in sight.
- When you’ve found the place you want to buy, it’s time to think about what you should offer. Find out what the current owners paid for the property and compare it to the asking price today. The larger the margin the more room there is for negotiation.
- New builds are a good place to spot a bargain if period features aren’t on your must-have list. Many developers just want to shift stock and so if you come across a development with lots for sale, it’s likely they will take a lower offer than asking price.
- When you make an offer under asking price on any kind of property, it’s worth making it clear that you are a serious buyer – and one who is ready to go. Explain you have a solicitor waiting in the wings and finances available.
Before or after Brexit?
Many would-be buyers might be (understandably) wondering: should I wait until after Brexit to buy property? No one knows what’s going to happen and if the time is right for you to buy now then by all means start your search.
However, you should weigh up the fact that house prices have been declining and could continue to fall during 2019. Just like the stock market, the experts all agree that trying to time the market is near impossible — and perhaps foolish. It’s more about individual circumstances. If you find the right home and the numbers add up, then it’s worth considering. After all, it’s a home as much as it is an investment.