It’s a buyer’s market after all

Recent years have seen an increasing amount of panic relating to the worldwide financial situation. An economic downturn can have an adverse affect on many who have allowed their borrowing to run away from their ability to pay back what they owe. The fact that many people may be struggling to borrow sufficient funds to buy a house should not deter those who are capable. What is important is that an investment the size of a house is properly considered and planned in the first place.

The UK’s personal debt now stands at ?1.36 billion, meaning the number of people in the country who owe money for credit cards, loans and mortgages is more substantial than ever and there are far more people in the red than in the black. Part of the reason is that many people have seen an opportunity for a short-cut; either to what they consider to be a secure family home, or to a larger investment in a property or group of properties for business purposes.

It’s a bleak outlook for many. However, as a slight rally in house sale numbers has proven in recent weeks, there are people out there who have been able to take advantage of this market slow-down and snap up properties which had previously been just out of their price margin.

And it proves a point – if you have been able to accumulate your savings into a decent-sized deposit, there are some real bargains out there. Mortgage lenders still have good deals for first time buyers with up to 25% deposit on the property value – large deposits act as buffers against falling house prices, and enable the mortgage lender to have confidence in the buyer.

The average asking price in England and Wales dropped by 1.8% during the four weeks to July 12, 2008, following a slide of 1.2% during the previous month. Rightmove said the fall, which was the biggest ever recorded for July, left the average asking price of a home at ?235,219 – 2% less than the corresponding period in 2007. Sellers are finally realising that they have to undercut other properties on the market as the number of homes for sale continues to soar. In addition, the number of unsold properties estate agents have on their books rose for the sixth month in a row to reach an average of 77 homes per estate agent.

Therefore a message to potential first-time buyers; if you have a nest-egg saved then now is the time to use it to its best effect whilst it’s a buyer’s market. It’s best to get the best advice first, however.

Mortgages, like any other form of substantial investment, should be considered fully prior to the signing of any deal. The right deal should work hard for an individual, regardless of the global situation and with the proper research, advice and thought, borrowing in order to purchase a home should be the most secure method of ensuring a comfortable future.

Paul McIndoe writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.