There appears to be a bun fight or a bidding war happening right under our noses at this moment in time and not unlike the time when the word ‘Gazumping’ which is not illegal, was the buzz word.
No doubt, the house buying frenzy that we are seeing now in the UK, is partly due to the Stamp Duty Holiday as considerable savings can be made, coupled with historically low interest rates, the Help to Buy scheme and the new 95% LTV (Government backed Schemes) it is certainly a recipe for a big bun fight-but someone always gets hurt, maybe not immediately, but at some point.
It is worth bearing in mind, that the money saved with the stamp duty holiday could be wiped out by having to pay more for the house than what it is worth, with the vendor/agent starting an auction as opposed to accepting the first offer at the advertised price.
Although we all know the saying “it’s only worth what someone is prepared to pay for it”-though inflated prices will not always stay inflated!
Of course, surveyors/valuers are experienced and have a duty of care, but we are not seeing many down valued properties, as in recent times. So, is their less caution now? Are the giants of the property market-the lenders, enjoying their own feeding frenzy, with the return of 95% mortgages even without a government guarantee, re- emerging with the inherent risk of lending close to property value.
A good agent will always have their clients’ best interests at heart and obtain them the best offer for their property, but when a property goes up for sale, it has a sale price not a starting price-although or nearest offer (ono) is becoming more prevalent!
An old fashioned view would be agree a price with the vendor/agent, shake hands, sign a form, and then go ahead, but sadly when Countrywide one of the biggest estate agents say they are receiving 5 or more offers for every property and often sold for more than the original asking price, it is a tricky situation for all.
Old fashioned views are not uncommon and the dream of a calm house buying process, with all the desire and passion is possible, even with all the parties involved wanting a piece of the cake-including mortgage brokers and it is therefore imperative that you surround yourself with a ‘circle of trust’ and sometimes not getting involved in the bun fight and let your head rule can be the wisest decision.
There will always be talk of a bubble when the property market is buoyant and people will question whether it is worth waiting until after the frenzy to buy and for everything to settle down, which it will probably do, but will prices will drop accordingly-who knows!.
As with investing in the stock market, it is time in the market, not the timing of the market that is important and when buying your new home, it is easy to get to absorbed in seeing the property as an investment and not as a home-there is a subtle but significant difference. Buying your first home or your indeed your second third of fourth should be pleasurable and be viewed as a long-term plan.
Unless of course you are trying to make some quick money or increase your monthly income via a Buy to Let and then that is a whole separate topic.
- South based Hamptons Estate Agents head of research Aneisha Beveridge recently said “There were twice as many applicants registering to buy in March than during the same month last year, but 19 percent fewer homes” and I’ve no doubt this is reflected across the whole of the UK.
- House price research from Ascend properties based in London and the North West, found prices increased by 9.8 percent in the North in the year to last January, compared with 6.6% in the Midlands and 6.4% in the South.
- No doubt Covid has also influenced the market, not least due to people being cooped up inside thier homes for hours on end, and the rise in prices are across the world not just the UK.
- In America prices increased to 11%, in the year to January, their fastest pace in 15 years.
- In New Zealand they were up 22%.
- The Financial and Business magazine the Economist tracks 25 countries and said that prices have risen 5% on average in the last 12 months, the quickest in a decade, and an interesting comment from Savills the property consultancy that “home values are being driven by the haves rather than the have nots” and again that opens up a whole new topic.