For the first time since the post-recession crash, house prices are on the up. In the 12 months leading up to March 2013, prices increased by 2.7%, compared to just 1.9% in the year to February. The increases are fairly stable, although London is seeing a particularly high increase of 7.6% and Northern Ireland is still falling.
This new evidence is the first sign that the housing market might be on the mend and has come about as a result of the government’s support, according to the Royal Institution of Chartered Surveyors (RICS). The Funding for Lending Scheme and Help to Buy initiatives created a huge demand for residential properties, but that the supply is still low.
Peter Bolton King, spokesperson for RICS said that it was encouraging to see that these government-backed initiatives are improving the property market. However, there are concerns that prices will start to increase and that prices will continue to increase for the rest of the year.
While this may be good news for the economy, housing market and sellers, the figures couldn’t have come at a worse time for buyers on lower incomes. As people continue to feel the squeeze on their income, they news that prices are on the rise will be far from welcome.
With that in mind, here are the top three ways to buy a home for less:
Buy new build properties off plan
For many people, the best way to get onto the property ladder is to buy a brand new build. With over 100,000 houses being built every year, they are an affordable and realistic way to get your hands on a property for less. There are some obvious advantages, such as paying over the asking price, no redecorating and energy efficiency.
It may be worth looking at what other similar properties in the same postcode area are being sold for; this will help you decide whether you are getting a good deal. If possible, find out from the developers or estate agent just how many units have already been sold.
Never buy from CGIs alone, make sure you do actually get to visit the development, even if it’s just to get a feel for the area and see the plot. By visiting, you might be able to get a property with the best view or biggest garden.
If you’ve spotted a new development and are thinking about buying off-plan, here is how to go about it:
• Arrange finance for the property in advance
• Expect to pay reservation fees of anywhere up to £1,000
• Get a valuation by a surveyor
• Finalise the mortgage paperwork and pay the deposit
• Know your short stop and long stop dates
• Prepare for completion
Buy at auction
An auction is a really exciting experience and also great way to bag a bargain. You don’t have to rely on estate agents, who are being paid to sell you a home, as you can see the other bids and interest in the property for yourself.
Once you’ve spotted a lot you like the look of, study the catalogue and legal pack in detail, arrange a survey and view the property before auction day.
In most cases it’s a good idea to visit the property at least twice, so that you’re aware of issues with the house. Auction properties are often in poor condition and require renovation, so be aware of the costs involved before you place a bid.
While buying your home at an auction does have some major benefits, it’s important to watch out for the disadvantages too. If you’re planning on bidding at a property auction, make sure you have agreed a mortgage in principal with your lender before signing the contract. You are required to put down a 10% deposit on the day and if you don’t obtain the remaining 90% within 28 days, you’ll lose the property and your cash deposit.
Buy in a cheaper area
The annual house price increases in England were mainly driven by huge rises in London and the South East. In fact, if you exclude these areas, house prices in the UK only increased by 0.6% in the 12 months to March 2013 – a far cry from 2.7%.
The average house price is £374,568 in London, an increase of 9.6% compared to one year ago and £208,479 in the South East. These incredibly high prices are at least double the average found elsewhere in the country: £97,033 in the North East and £106,536 in the North West.
These huge price differences show that you could make significant savings on property by buying in a cheaper area. The location of a property has a massive impact on its value, but most of the time you will find that you are paying thousands of pounds more just because of the post code.