Property prices reached another record high in May, with the average home increasing in value by £3,000 in the last month alone. Halifax, one of Britain's biggest lenders, has reported that house price inflation is at its strongest level in seven years. With many families unable to go on foreign holidays this year, this housing boom looks set to continue throughout the summer.
Written by Lisa Proffitt | 26th June 2021
Michael Graham Guide to Buying in a Hot Market
For buyers it is critical to keep a cool head in this hot housing market. Read on for our top ten tips on how to buy the home you love at a price you can afford.
Be realistic about your finances
Once you've fallen in love with a property, it's hard to go back. You start dreaming about waking to bird song instead of road noise, or cosy winter evenings by the log burning stove. So, to avoid temptation, start your search at the low end of your price range. You may well find your dream property there without making life harder for yourself.
Get mortgage pre-approval
What the bank says you can afford versus what you are comfortable with paying is not necessarily the same figure. Conversely, what you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income. To avoid disappointment, secure pre-approval for a loan before making an offer on a home or even before you start seriously house-hunting.
While you should be realistic in your search and willing to compromise to some degree, keep in mind your non-negotiables. For example, don't buy a three-bedroom home when you know you're planning a family and will want four bedrooms.
See beyond the cosmetic
Distinguishing between what's fixable and what's not is a key part of house-hunting. Even if you can't afford to replace the avocado bathroom suite now, it might be worth living with it for a while if the home meets your needs in terms of the big things that are difficult to change, such as location and size.
Don’t under-estimate the work involved in a fixer-upper
If you're buying a project home, don't buy a fixer-upper that's more than you can handle in terms of time, money, or your own ability. If the work turns out to be beyond your capabilities, any professional repairs or upgrades will probably cost double. Honestly evaluate your abilities, your budget, and how soon you need to move before purchasing a property that isn't move-in ready.
Research the area
Research the surrounding area as well as the house. Are there any development plans in the pipeline for the neighbourhood, particularly regarding HS2? Is there a lot of undeveloped land around and is it likely to be built on? Have home values in the area been declining or rising? Make sure you’re happy with the answers to these questions.
Don’t rush in with an offer
In a hot market you may have to make an offer fast. However, you have to balance the need to make a quick decision with the need to make sure the home is right for you. Take a night to sleep on it and how you feel in the morning will usually reveal whether the decision you're about to make is the right one.
Don’t wait too long to put in an offer
It is a balancing act because if you take too long to make your mind up, someone else might jump in and have their offer accepted first. Your agent will be able to advise you on how much time you have to play with.
Don’t offer too much
When the market is hot it's easy to get sucked into a bidding war, or to try to pre-empt a bidding war by offering over the asking price. Proceed with caution. If the house isn’t valued at your offer amount, the bank may not approve the mortgage and when you come to sell, you may sell at a loss. Compare sales prices of similar properties in the area and get your agent's opinion before making an offer.
Book a survey
Before you exchange contracts, book a thorough inspection of the property. You don't want to get stuck with a money pit or the headache of unexpected and potentially costly repairs. Keep your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment.
We’re ready for a busy summer here at Michael Graham and whether you’re buying, selling or renting, we would love to help you put your moving plans into action. You can book a valuation of your home here, or contact one of our local offices where one of our friendly team of agents will be delighted to offer their no obligation help and advice.