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LiFE Director of Sales: 'What's all the panic about?'

Tags: london / Help to Buy / Property Investment / Property Sales / Mortgages

27 February 2019 11:35

The press love getting hold of a supposedly hot story not fully understanding the facts and therefore the ramifications of their “story” and fanning the flames. Let’s face it, a negative message would be half way around the world before the ink could dry on the parchment of positivity. Yet, having sold circa 250 properties worth more than £117 million across London last year and completing yet another record year at LiFE Residential, I challenge you to consider 8 reasons why, when you see the negative “property-gander” in the press, you should take a breath, do your own research and pour cold water on the fired-up reporters.

The property market has had its peaks and troughs historically, but one thing is always for certain: if you are prepared to be patient, the market is more stable than most other investment opportunities out there. Despite Government after Government implementing seemingly ill-advised cooling methods for the housing market, the prices continuously to steadily rise, the UK property market goes onward and upward. 

8 reasons why current market uncertainty is positive:

1. Rents are high: If you can secure a decent deposit, it almost certainly will be cheaper for you to buy than it is to rent. This comes with the added benefits of the capital appreciation of your asset instead of paying for someone else’s and the opportunity to possibly be your own landlord should the opportunity arise  

2. There’s a first time for everyone: If you are a First-Time-Buyer, there is an argument to say that there has never been a better time to buy! Rental prices are high, mortgage rates at record lows and lenders are willing to be flexible offering products like Help To Buy (HTB) thorough to loans where gifted deposits are being expected and even Later Life Lending for equity release of parents properties to help their children onto the property ladder. Once you are on the ladder and then decide to sell and buy something else things are fairly status quo – it then becomes all relative.  

3. Market instability can be positiveWhy? Because it creates opportunities: There are motived sellers out there now pitching at a realistic price point. The only issue with this is, you are going to have a lot of competition, so you need to be in a very good position to be the chosen one. 

4. Helpful bankers: yes, you heard me right! Lenders are doing all they can to find a way to lend to “Triple A rated” clients (+AAA). They need to lend to extend their book. The combination of a few factors including challenger banks (new banks and lenders entering a somewhat traditional dusty institutional arena) pushing the historically shackled boundaries and the cushion of LIBOR (London Inter Bank Offer Rate), meaning that interest rates should remain competitive even with the constant threat from the Bank of England of a base rate rise. The banks could become much more competitive (as have been seen in the mobile phone industry over the years), which could mean effectively flirting with you offering fantastic fix terms etc. to get your “+AAA” business. 

5. Government Help To Buy scheme: Another idea the Government have come up with to help First Time Buyers achieve their dream of home ownership. The scheme enables you pay a minimum deposit of 5% on new build homes worth up to £600,000. To qualify you must be a first or second-time buyer and not own or have a stake in another property. If you’d like to learn more about HTB scheme, read our helpful blog here

6. Investing in Bricks & Mortar is still “safe as houses”: The UK is still seen very much as the safe haven for residential investment, so if you have a property in UK, ideally London, my advice would always be if you don’t have to sell it then don’t. Take advantage of the cheap finance out there and release equity to buy another property. Remember: property prices long term only ever goes up! 

7. The only way is UP!: From when property prices were first recorded, they have only ever gone one way and that’s up. An average mortgage term is around 25 years and if you were to hold onto that property over that time (obviously there would be some ups and downs along the way) the overall price and your asset would be worth much more than you originally paid for it and if you had rented it out someone else would of effectively paid for it! 

8. Property developers: Dealing with property developers is historically challenging, so having the right relationship, proving that you are the best buyer or best seller (if you are selling them land, it is essential). So, be prepared. You can get great deals with some developers now, but it is very much not just what you know but very much who you know too. 

The negative mindset within the market has created a minefield out there and if you are not professionally guided through it you could get very hurt financially indeed. Therefore, choosing a real estate professional to accompany you on this journey is important. A professional has no sentimental attachment to the property you are buying or selling, so they can be impartial and negotiate throughout the transaction if needed with the lawyers, financiers, other agents or buyer/sellers in the chain on your behalf. 

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