This is a guest post written by Evelyn Kail. The views expressed in this article are not necessarily shared by Property Moose or DFI Financial Services.
The UK Housing market has been experiencing some ups and downs in recent months. The Brexit referendum, and the various moves by the government to make more housing available – have resulted in uncertainties for buyers.
Late in November last year, Philip Hammond announced the abolishment of stamp duty for first-time house buyers if their property was valued less than £300,000. It was not immediately clear how this would help the housing crisis in the UK. In some places, properties became expensive with sellers taking advantage of the tax break made possible for the first £300,000 of any selling price. It also, however, made more homes available in the London market.
In the subsequent months, though, the trends in UK housing seem to be quite mixed. By December of 2017, first-time buying had dropped compared to December of 2016. The average price of a house in the UK had gone up to over £220,000. While pricing had gone up between 2012 and 2017, the earnings growth hasn’t corresponded to this, making it difficult for people to buy houses.
Although these trends seem baffling, all hope is not lost. In 2018, things have changed yet again in the UK housing market; this time, for the slightly better. First-time buyers, and those looking to invest in properties can still go ahead and buy a home.
Here are 3 things that you need to know before you buy your house:
1 – Affordable homes are available. They may not be in London or Bristol but if your job allows you to telecommute, you may think about moving westwards to Wales. Newport, Wrexham, and Colwyn Bay are all becoming hot property hubs what with the removal of tolls on the M48 Severn and the M8 Second Severn Crossing. What’s more, their current asking prices are just over 50% of the national average.
2 – Buy-To-Let is still a viable option. This segment faced a slew of tax reforms last year and left buyers quite uncertain about investing in these properties. Again, London is not the best place to invest. Liverpool (6.2% increase in rents), Nottingham (6.2%), Cardiff (6%), Southampton (5.9%), and Greater Manchester (5.9%) are the top five cities where returns on Buy-To-Let saw significant increases. Places where rental demand is high, like university towns, remain a good place to invest in buy-to-let.
3 – A fixed-rate loan plan might be best for you. A marginal increase is expected in the base rate of the Bank of England and although no hikes are expected during the year, a fixed-rate loan means that even small additions are not felt by you. More properties are being built and are expected to come to the market. First-time buyers can take advantage of schemes like Help to Buy to further augment choices.
Home buyers should identify best places to purchase within their budget, make use of any relief the government offers, and enlist the help of established London estate agents to ensure a pleasant, fruitful home-buying experience in the UK housing market