Keep the Faith - Now's the time to buy !

When there's talk of a housing market crash, interest rate rises and an increased number of repossessions, surely I must be mistaken ?

Don't worry, I haven't lost the plot, but I do believe now's the time to be buying property, for four very good reasons.

The Bandwagon's empty

No matter what you're buying, you want to be buying when no one else is.

When I first started out, the local market for terraced housing was moving so quickly that you had to view a house the day it went on the market, and make your offer the next day. As you can imagine, this created a feeding frenzy, which pushed prices higher and perpetuated the problem for buyers.

At the time, we decided to look at the next property band, where there was less demand and found ourselves a 2 bed flat in a nicer part of town, for little extra cash.

At the moment there are fewer viewers and even fewer people making offers, meaning you're in a far better position.

Long term interest rates

I know that we've seen a number of rate rises recently, and people are forecasting another, but the cost of borrowing is still very low.

To be pedantic, the problem isn't the interest rate, but the relationship between rental income and interest rates and particularly whether a property will pay for itself.

I've had a number of conversations recently where people are growing concerned, as a further rise will give them a shortfall on their rental income and when we've looked at numbers, it turns out that they may end up £25-£30 short per month.

Whilst I like all of my houses to generate a positive monthly cashflow, I can't get overly excited about a monthly shortfall of £30 a month, as it equates to £360 per year or put another way, less than £1 per day.

I don't mean to be facetious, but when property's still going up at around 8% per annum, this means that a £100,000 house is increasing in value at £8,000 per year, you'll understand why I can't get excited about £300 !

Wouldn't you rather save your £1 per day elsewhere ?

Motivated sellers

Given there are less buyers around at the moment, it's easier to spot someone who needs to sell.

If you can't tell within the first five minutes of a viewing, ask them the usual questions of why they're moving, where they're moving to, would they like to rent their house until they find somewhere else etc.

You can also ask the same questions of the estate agent, as someone will let the cat out of the bag and as soon as this happens, you know there's a deal to be had.

I know that many people talk of 20% and 30% discounts, but in our neck of the woods, unless someone's about to get repossessed, you're unlikely to get these kind of discounts.

The surveyors are helping too

Like most people, I don't like being shouted at, but I imagine that being sued would be even worse, so you can understand why valuers get a little scared after reading the Sunday tabloids.

Naturally, this clouds their judgement through the week and means that the numbers can be a little lower than the vendor would have hoped.

For you, as the purchaser, this can be a good thing, as you can blame the nasty valuer for having to reduce your offer. Sometimes it works and sometimes it doesn't, but if you find a seller who's flexible or even better highly motivated to sell, you're quids in.

Even if you don't get a reduction, you believe that the house is worth the money otherwise you wouldn't have offered on it in the first place.

The best bit is that as soon as the stories in the press start to improve, so does the valuers mood and the value of your property.

A wiser man than me once said;

"If you can keep your head when all about you Are losing theirs and blaming it on you; If you can trust yourself when all men doubt you, But make allowance for their doubting too; . . . If you can meet with Triumph and Disaster And treat those two impostors just the same . . . Yours is the Earth and everything that's in it

Rudyard Kipling