Getting onto the property ladder can be tough these days. High property prices and stagnant wages have meant that it hasn’t been a good time for those looking for jump onto the bottom rung of that all important housing ladder. Research shows that the average age of a first time buyer is now seven years higher than it was in 1960, with most people needing an average of £20,000 in savings to be able to afford it.
At the same time, the property market in the UK has been increasingly gaining popularity amongst investors as they are beginning to realise the tremendous potential of real estate investments in the UK as a way to make profits.
Some cities in the UK offer attractive prospects for capital growth and good rental yields, making them an ideal form of inheritance in a property Will. For this reason, investing in property, whether residential or student, can make a great investment and might be a better use of that deposit money than buying a property for yourself.
If you are considering buying property -either as an investment or to live in – the following are some of the most important things you should always consider:
Speak to Letting Agents Before Buying
A common mistake that many investors commit is that they skip the crucial step of consulting local letting and estate agents. It is advisable to speak to a local real estate agent before buying a property, irrespective of whether it is for residence or for investment purposes.
Letting and estate agents will naturally have invaluable knowledge about the locality and the likely rental or resale prices you can hope to achieve, should that be your plan. You can also enquire about the prospects of finding good tenants and the expected rises or falls in prices that might be just over the horizon, and which may affect your decisions.
Make Local Comparisons
The second common mistake that some investors are guilty of, is that they fail to make proper local comparisons. It is simply not enough to know which other properties are on sale in the same neighbourhood as the one you have shortlisted.
Just like we tend to shop around a bit before buying a clothing garment or electronic accessory, you need to gain a good picture of what the alternatives are.
Besides using online websites for research you should make enquiries with multiple local letting agents in different localities and get an overall sense of the property rates. You need to consider the potential properties that lie within at least a half mile radius of the house that you are considering to buy.
To better understand what you are buying, you need to dive deeper into data as it will get you acquainted with other important details such as how long it takes for a house to be sold in this locality and how prices have changed in the past and how they are likely to change in the future.
Make Sure That the Data is Right
It is quite possible that you are being misled by a local estate agent into buying a property which may not be as good as it is being presented as being. At the same time, it is also possible that you are, unintentionally, taking wrong numbers into consideration.
This can happen when you research only on the internet and don’t take physical efforts to verify the same. If you are looking at sold price data on a website and the area isn’t densely populated, you may not be able to correctly estimate the selling price of homes as there may not be sufficient data.
To create the right picture of the market you may have to broaden your search for properties which have been sold and go back several years to know the trend. Once again, it is not advisable to rely entirely on the story that these numbers have to tell. Old data should not be the basis on which you make a decision as big as buying a property.
Understand the Local Area
If you are buying a property in an area where you live, you can skip this step as you are already familiar with the locality. But if you are about to buy a property in a different area altogether, you may have to make some effort to understand the local area. This step shouldn’t be skipped simply because the area is located an inconvenient distance away or because you assume that you can know about an area by making enquiries on the phone.
You may want to know what the area is like on weekends, how safe the streets are for children and the proximity of important landmarks to the property you are about to buy. Besides the ability of these factors to attract tenants, it can also have an impact on the value of the property, should you decide to sell it at some point down the line.
Trust Your Instincts
It is easy to dismiss your own intuition if you are being influenced by an estate agent or because logic says buying a particular property will give you good return on investment. If you are buying a property with the intention of residing in it, it becomes even more important to trust your instincts.
Unlike other purchases that we make in our daily life, there is no return or exchange policy when it comes to houses. Therefore you need to carefully consider the advantages and disadvantages of buying the property that you have set your eyes on.
Another thing that you must remember is that you should never become desperate to buy a property. Your desperation can make you take decisions that you may regret later such as buying the wrong property or paying more than a property is really worth.
It is easy to become eager to buy a property if you have chased many offers but have been unable to seal a deal, but it is in these situations that you must remember to stay calm and work harder to open up other options. Cover as much ground as you can and finalise a property only when there is no better alternative.