10 Jan Why it’s time to make an offer on a property
Now is the perfect time to make an offer on a property. According to the Office for Budget Responsibility (OBR), house prices in the UK are expected to drop by 9%.
In their recent survey, they predicted that this will occur between November 2022 and autumn 2024 . Homeowners are undoubtedly nervous, and many are looking for a quick sale before thousands of pounds are knocked off their current property value.
With this in mind, the property market has become a buyer’s paradise, with first time buyers in particular now able to find affordable properties, assuming they can get a mortgage and can put down a decent deposit.
Buyer Beware
Even though the current property market favours buyers, caution should still be taken. When making an offer, buyers should always aim low to begin with. Buying a property above its asking price means that there will be less opportunity for capital growth in the long term. Aiming low allows room for negotiations if needed.
Finances need to be in place. The current increase in interest rates has contributed to higher mortgage costs. An average two or five year fixed rate mortgage deal currently comes with interest rates of around 6%. Therefore, it is essential to have a decent deposit and financial plans should be organised in advance.
Buyers can currently seek out bargains at auctions. In particular, properties that require refurbishment are highly sought after. Buyers wishing to invest in these types of property should remember to seek professional advice before making a bid. It’s essential to understand the full extent of the work needed beforehand and its financial implications.
Buyers are advised to get a thorough survey, as this is a good way to avoid unexpected repair costs further down the line. The homebuyers report cost will vary depending on the type of survey carried out.
Types of homebuyer survey
The RICS Condition Report is a very basic survey. It describes the condition of the property and will identify any risks and potential legal issues. It will also cover any urgent defects. This type of report is suitable for new builds and homes in good condition. For a property valued between £200,000 and £300,000, the average cost is £400 for a report.
The next level is a HomeBuyer Report and is usually suitable for properties in reasonable condition. Costs start at £400 and prices increase depending on the property value. The report will identify any structural issues, such as subsidence or dampness. The report will not look beyond the floorboards or behind the walls, so some issues might be missed.
Some reports include a property valuation, which may be helpful should the buyer need to renegotiate the price due to repair work. Firms such as Sam Conveyancing can advise on homebuyer reports should you need it.
A full structural survey is the most comprehensive survey available and is suitable for all residential property types. This type of survey starts at £600 and provides detailed advice on repairs. It offers extensive, in depth reporting and is particularly good for older homes or those that might need significant repairs.
Whilst there is considerable variability in the current property market, this may present opportunities for some.
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