Rightmove claims that more than two thirds of potential first time buyers think now is a good time to buy a property. With Property prices significantly lower, even in the most popular areas, and interests rates remaining low, it could be a once in a lifetime opportunity for the current generation of first time buyers.
Jackson Barrett & Gass Marketing Manager, Rick Barrow said “From an industry point of view, I believe the local area has hit the bottom of the market. Property prices can only drop to a certain level, before they get snapped up and I’ve also seen examples all over the UK. I therefore think it is a great time to enter the market.”
As a first buyer himself, Rick would admit to being prompted by a friend to investigate the true current market.
Rick said “I had been first alerted to deals by a friend from University who is now a serious investor. He sent me details of a repossessed 2 bedroom, 2 bathroom flat in Didsbury. Somebody had bought it for £210,000 in 2005 and it sold to a cash buyer for £110,000 in July 2008.”
Repossessions proved to be a good place to start. Often, they indicate what administrators view as a reasonable price, although it ultimately depends on how much they are owed and how quickly they want the money.
Most would claim that Rick has an unfair advantage over other first time buyers. He works for Jackson Barrett & Gass Solicitors who specialise in Conveyancing, and therefore has a greater insight into the state of the market, and more contacts to call on for opinions.
However, Rick would point out that he had to go through the usual problems that most first time buyers face all, over the country.
Mortgages are still proving a problem for most buyers, let alone first time buyers. Rick said “I had about a 15% deposit available and got 2 mortgages agreed in principle by 2 high street lenders. However, when I enquired about a new build property, the deposit required suddenly jumped to 25%.
I had to search high and low for about 2 weeks, and was eventually given a tip by a broker about an in-branch only mortgage deal which was perfectly suited to the my deposit.”
Rick eventually found a new build flat that was the last for sale, and offered with a significant discount and gifted deposit. The latter, complicated things significantly.
“For numerous reasons, some lenders have become uneasy about new build properties, and hence the higher required deposits with certain lenders. However, I actually think they represent the best opportunity for first time buyers struggling to raise a deposit.
Several major builders we work with are proving to be more flexible with incentives, and also offer several purchase plans such as shared equity; the buyer owns 100% of the property but is assigned a 25% interest free loan for a period or until the house is sold (registered as a second charge).
Another is the Government’s Home Buy Direct Scheme. Both schemes solve first time buyer’s problems with deposits, as none are needed, and we have seen a significant increase in purchases through the Home Buy Direct Scheme.
Having said that, first time buyers with a deposit should also research the complete residential market. It is worth registering with some agents in the areas that interest you, and be specific with what you are looking for. I would also start the mortgage process early, so that you able to move quickly when you decide upon a property.”
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This article appeared in Wilmslow Express Homesearch 21/05/09