17 Mar | House Price Rises: Is now the right time to invest?
According to a recent article in The Telegraph, house prices have risen by ‘9.7pc in the year to February’. This has supposedly been driven by a number of different aspects in the housing markets, which in turn has led many to question whether or not this is the right time to invest in property.
In this post, we take a closer look at what these reasons are for the aforementioned price increases and look at what options there are available for those looking to buy.
A lack of housing
One main reason for the rises – as the Telegraph piece alludes to – is that there simply isn’t enough houses for those looking to buy in the UK. The lack of supply ultimately leading to higher demand.
Increased demand in certain areas
This then leads to an oversubscription in certain sought-after areas. London currently leads the way with the average house price in the capital being above the current national figure. Subsequently, the commutable surrounding areas such as the south east are then also becoming more expensive.
Growth of buy-to-let
Another contributing factor to price rises is the growth in buy-to-let investments. Those who can afford to buy have been investing in buy-to-let as they know they’ll be able to rent out a property in the oversubscribed housing sector. The effect though is that these investors are again lowering the number of available properties and in some cases forcing people to have to turn to the private rental sector.
What to consider
With the above in mind though, it would seem that now is the right time to invest, given that prices are set to continue rising. With this you have a few options if you’re wanting to make your first steps into the property markets, or if you’re simply looking for a new home.
Firstly, you need to be realistic about your chosen location, as the above highlights many areas are more in-demand than others so to bring costs down you should look at surrounding towns and villages of your desired location. If you’re a first-time buyer you should shop around to see what mortgage deals and support are available for people in your situation. Lenders like Saffron Building Society for instance have offers available to support those with smaller deposits.
Lastly, a good tip is to weigh-up what the essential features of a property you need and aim for the bare minimum. Chances are this will help you find a more affordable option, but you’ll need to be prepared to work on improving this after you’ve moved in.