The start to 2020 has told two very different property stories.There’s been great news for home owners as a post-Brexit bounce has seen annual house price growth at a 14-month high.
However, the rise in prices seems to be having a knock-on effect in the confidence of would-be first-time buyers. A recent survey of renters revealed that 82% of those questioned said they are now concentrating on raising a family, paying education debt, living in a convenient location, travelling or even funding hobbies rather than saving for their first home.
The research carried out by Dutch bank ING also showed that more than a third of renters who have never owned a property (40%) don’t expect to be able to buy – and only nine per cent planned to purchase a home before the age of 30. This is backed up by the national statistic that shows the average age of owning your first home has risen from 26 in 1997 to 34 in 2019.Yet, the ING survey did reveal that the vast majority of renters still had aspirations to own their own home.
What could tempt these reluctant renters to make their dreams of home ownership a reality?
As house prices continue to rise property auctions could be one solution and an avenue definitely worth exploring. It’s fair to say that auctions are considered to be the domain of investors and developers. However, they also offer up great opportunities for general home movers and first time buyers.
Auctions offer the opportunity to buy property at cut price and can be particularly attractive to DIY enthusiasts. Buying a property at auction at bargain prices followed by renovation can see a significant return on investment.
Auctions also offer a very quick way of purchasing a home as transactions must complete within a fixed period; typically 28 days. When the gavel falls, the buyer commits to the purchase by exchanging contracts with a 10 % deposit. Neither side can back out of the deal so there is no risk of gazumping.
Anyone who attends an action and requires finance will need the support of a good mortgage broker; preferably one that has experience of assisting buyers through the process at speed. The broker will talk about budget, affordability and the types of properties buyers are interested in purchasing as the property must be considered mortgageable.
Buyers will also need to speak to a good solicitor to review the legal pack, receive advice on any potential problems and clarify the conveyancing costs and any Stamp Duty Land Tax liability. These conversations should take place well before the auction.
We would advise people to familiarise themselves with the auction process and it would be very worthwhile to attend a couple before buying.
If buyers see a property up for auction they are interested in buying preparation is key. Go and view the property on different days and times as well as research sold values in the local area. It’s also a good idea to have the property checked over by a builder or surveyor.
Provided would-be buyers have done the necessary preparation the rewards at auction can be considerable. The number of residential lots sold at auction has increased in the 12 months up to December 2019, (EI Group). DMI Finance has attended many auction since the beginning of the year and already we can predict that figure is set to increase again in 2020.
We would welcome any enquiries from all prospective purchasers, from first time buyers to experienced landlords. Auction Finance is our speciality and we’re here to guide you through the process. Our experts attend property auctions across the country.
