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Making the Most of Your Housing Budget

Making the Most of Your Housing Budget

by | Oct 9, 2020 | Mortgage News

Your choice of location will be a significant factor in the ultimate cost of your property.  It, therefore, makes sense to choose it wisely, especially if you are on a tight budget.  Here are some tips.

Get to know an area before you think about buying there

Buying a property generally involves a lot of up-front costs.  Right now there is a freeze on Stamp Duty, but this is only intended to be temporary.  Even with that freeze in place, however, there are other costs like surveying and conveyancing plus the cost of moving yourself and your belongings from A to B.

The longer you stay in a property, the longer you have to absorb those costs – and vice versa.  This means that if you’re on a tight budget it’s vital to think about what could happen in your life over the next 3-5+ years.  Then think about whether or not a given area would still be a good place to live if your circumstances were to change.

Think particularly carefully about what might happen if you wanted or needed to change your job.  Would you still have a decent chance of getting another one within reasonable commuting distance?  Unless you can confidently answer yes to that (or are really secure in your current job), you might want to carry on renting and/or look in a different area.

In short, buying a property in an area which is wrong for you can be very expensive.  If you’re on a tight budget in the first place, it’s especially important to avoid this mistake.

Think about the type of property you need (and want)

Similar comments apply to choosing the right type of property for your needs.  Think about how your lifestyle might change over the next 3-5+ years and see what this means for the type of property you will need.  This is particularly important if you’re planning, or even considering, having children.  Think carefully about the practicalities of babies and toddlers.

For example, having a baby or toddler in a top-floor flat may be fine if you have a lift (or preferably more than one).  You may not, however, want to be negotiating multiple flights of stairs when you have a pram or a pushchair.  Instead, you might want to focus your search on lower-floor flats and/or mid-terraced houses.  These are similar to flats in that you have neighbours on either side, but do not require you to go upstairs with a pram or pushchair.

Look for areas which are in the process of redevelopment

If money is tight, then you may struggle to find a suitable property in an established, desirable area.  At the same time, you may not want to buy in an area with a very questionable reputation.  The compromise option may be to look at areas which are currently not particularly desirable, but are safe and acceptable and look like they might have decent prospects.

Start by looking at areas which are on the fringes of (or just outside) either desirable areas or key transport facilities (or both).  Your budget will dictate how far out you need to go.  Then use local knowledge and/or research to identify areas with growth potential.

Look at the facilities available locally, both practical and leisure.  Firstly, you want to be sure that there is enough in place already to meet your needs.  Secondly, you want to get an impression of where the area is headed.

For example, what is the ratio of budget-friendly facilities to premium facilities?  Are there any new economic developments planned for the area?  Are there new transport facilities planned?  If there are, you may have a window of opportunity to grab a bargain before these changes are priced into the local housing market.

 

Your property may be repossessed if you do not keep up repayments on your mortgage.

 

 

What do house hunters want most?

What do house hunters want most?

by | Oct 3, 2020 | Mortgage News

COVID19 has forced many of us to reassess the way we live and work.  Over recent months, the line between life and work has become increasingly blurry for an increasing number of people.  Working from home may not quite be the new standard for everyone, but it is the new normal for a lot of people and looks set to stay that way for the foreseeable future.  A recent study by finder.com suggests that this may be influencing house hunter’s priorities.

The space race is on

Priorities one and two were if a property had outside space (and the size of that outside space) followed by the size of the property itself.  These were cited by 33% and 28% of people respectively.

It’s hard to see this as being anything other than an understandable reaction to the lockdown.  Families with children, especially young ones, will probably have a very strong wish for safe outdoor space for them.  Even people without children (or pets) may feel reassured to know that they have access to safe outdoor space, especially if there is any prospect of gyms closing again.

Indoor space matters too.  If you are only working from home occasionally, then a decent home office is a “nice-to-have”.  If you’re working from home all the time, then it’s a whole lot more important.  In principle, the need for home office space may be temporary, albeit long-term temporary.  In practice, it is looking increasingly like home working is going to become much more a feature of work long into the future.

Transport still matters

Priorities three and five were parking and good transport links.  These were cited by 24% and 21% of people respectively.  It’s interesting that people are citing parking more than good transport links, albeit only slightly.

This could signal a growing preference for the privacy of cars rather than the potentially germ-infested environment of public transport.  It could also signal that people are prepared to move further away from the main commuter links and drive to them if necessary.  After all, if you’re only going to be in the office one or two days a week instead of five, then you might be perfectly happy to trade a longer commute for more space and/or lower prices.

Quality of life

Four of the top ten features related directly to quality of life.  These were:

#4 The property being in a nice area   22%

#6 Being closer to family/ friends         17%

#7 Being close to amenities     16%

#8 Situated in an area with a low crime rate    14%

It’s interesting that people are currently mentioning the crime rate as being a key factor in their decision-making process, albeit one which is fairly low on the list.  This could be a sign that people are becoming increasingly concerned about what the future may bring and the impact it could have on their personal security and the security of their property.

Maintenance costs and looks don’t matter too much

The cost of running and maintaining the property and how the house looks were cited by 14% and 12% of people respectively.  This put them on ninth and tenth place on the list.  Possibly this reflects the fact that maintenance costs can often be improved.

It is interesting that only 12% of people cite how the house looks.  This does rather fly in the face of conventional sales wisdom.  Real estate professionals regularly tell their clients to make sure that their homes look as good as possible and give them tips on how to do this.  It’s difficult to interpret this point, but one very feasible suggestion is that buyers are prepared to overlook a questionable exterior if the property meets their needs in other ways.

Your property may be repossessed if you do not keep up repayments on your mortgage.