Is it the right time to buy your first home?
Is it the right time to buy a house? Well, I’m an East London estate agent so of course I’m going to say yes! But owning a house carries a lot of responsibility with it so it’s important to do your sums before you decide to become a first time buyer.
Fortunately, schemes like Help to Buy are available to make it a bit more affordable, and estate agents, mortgage brokers and conveyancers are all here to make the house buying process as smooth as possible.
The London property market in 2018
Property is nearly always a sound investment as it usually increases in value simply because house prices continue to rise, albeit slightly more slowly than in former times. One analyst at the London School of Economics has called the risk of another 2007 crash “outrageously unrealistic” and most homeowners and investors are feeling quietly confident about the London housing market.
Mortgage repayments cost less than rent
If you’ve done a rough mortgage calculation and found out that your monthly mortgage repayments would be less than your rent, it’s easy to jump to the conclusion that you can afford to buy. But it’s important to remember that that’s not the only sum you have to do. Once you own your home, you’ll be responsible for insuring, furnishing and repairing it so you need to consider whether you can afford that on top of repayments.
Can you save enough for a deposit?
Another important consideration is the deposit. It’s difficult to quickly save up 10% of a property price to put down as a deposit, so long-term planning is key. Remember that saving up as much as you can will pay off eventually – the larger the deposit you can put down, the smaller the mortgage you will need. You will also be offered a lower interest rate as you’ll be seen as a smaller risk by mortgage lenders. Help to Buy and Help to Buy ISAs are available to help you save – you can find out more about them here.
How’s your credit rating?
A good credit rating will help you to prove to a mortgage lender that you’re worth lending to. If your credit rating could be better, it might be worth waiting until it recovers. You don’t want your new house to end up being more costly just because you’re having to pay high interest rates on your mortgage.
How’s your spending?
If you’re applying for a mortgage, stand by to have your bank statements scrutinised. Modest, thoughtful spending is going to look better than evidence of splashing out on a new car or using your credit card to cover a holiday.
If you’re hoping to buy your first home soon, consider all these points before you take the plunge. You might need to wait a couple of years, giving your credit history time to recover and your deposit time to grow, but I’m sure you will get there in the end. It is well worth owning property if you can afford to – it nearly always increases in value and provides you with a secure investment for the future.
Buy your first property in East London
I have a number of properties on my books at the moment that would be great for first time buyers, including the Hunts Wharf development in Clapton, E5, which you can purchase using Help to Buy. To find out more, give me, Adam Dockley, a call today on 020 3633 4440.