"There are questions which crop up every few years but never really go away"
Knowing whether to buy, sell or wait is something which would drastically benefit a borrower – if they knew the correct answer.
Nick Morrey (pictured), technical director at Coreco, explained that with any market, there are questions which crop up every few years but never really go away. However, he said every year the answer stays roughly the same - which is it largely depends on your individual situation.
“If you are a first-time buyer then waiting for a property crash is often what is really being hoped for, but in the last few decades that simply has not happened that much, especially in London where prices have not really fallen for quite some time,” Morrey said.
Every year a first-time buyer waits, he noted, means they will be another year older when the mortgage ends.
Morrey explained that it will also mean they have paid rent for another year to someone else, or they have stayed at home with their parents for an additional year.
“Lastly, if prices do not fall but increase, even a little, they will need more deposit, a bigger mortgage and may pay more stamp duty, as well as having paid rent for an extra year,” he added.
If prices do fall, Morrey outlined many potential vendors may well be put off selling, so the choice of property to buy is often very limited.
“There is, however, an understandable fear of buying at the height of the market only to watch the value of your property fall while sitting on a sofa watching TV,” Morrey said.
Read more: Is it best to buy, sell or wait?
Although this is always a possibility, Morrey explained that in nearly every single five-year period since 1950, property prices ended higher than they began, even with a property crash in the middle or at the end.
Since a loss is only a loss if you actually sell the property, Morrey pointed toward renting the home out, and waiting for a few years for its value to rise.
He believes it is best to test the market, find out how much everything will cost and get any mortgage needed agreed in principle. Morrey explained that another buyer may be coveting your potential property, prepared to pay good money for it and, before you know it, the home of your dreams is gone.
While interest rates are rising, Morrey said they are still at low levels, and, as such, he believes the best plan of action for any buyer is to figure out exactly how much they will be paying month-on-month and the overall cost to get the purchase over the line.
“Talk to a professional broker and ask what the payments would be if the base rate went to 3%. Consider all the possibilities that worry you and then decide. No-one is forcing you, well, hopefully not,” he concluded.
What if you want to sell?
“For those looking to carry on up the housing ladder, the above all holds true - but I have always advised people thinking of selling and moving house to get their property ready to sell and on the market as fast as possible,” he added.
Morrey went on to say that if a seller is on the fence about letting their property go, then he suggests setting a ‘punchy price’ and to bear in mind that they do not have to accept low offers.
“Waiting a year or two when you could make the move now could cost a lot, but the biggest issue is often choice,” he said.
Moving up the ladder, possibly with children, brings with it a list of requirements, Morrey said - for example, location, noise levels, garden size, room sizes and commuting distances.
“Although some of these are ‘must haves’ and some are ‘like to haves’, if you are waiting for prices to fall and that does happen, there is often a lack of choice - plus you have to sell, which is not easy in a weak market,” he said.
Read more: Supply vs demand: Which is higher in the UK?
“So, should you buy or should you sell? My advice is if you want to and if you need to then ‘yes’, get on with it,” Morrey said.
