If you’re thinking of buying a house during the recession there are some key things to look out for. Particularly first time buyers, as the stamp duty holiday adds more appeal. There are many factors to weigh up before making the decision.
More advice: Best mortgage rates and how to find them
Property expert Nima Ghasri, Director at Good Move, offers tips on the things to consider when looking to buy your first home during the recession.
Tips for buying a house during the recession
1. Save, and then save more
‘Sounds cliché, but the more money you have saved, the better’ says Nima plainly. ‘You need to establish how much money you can put towards the cost of a new home. The bigger your deposit, the better mortgage rate you’ll be offered. Plus, your monthly repayments will be lower.’
Adding, ‘I advise saving a minimum of 10 per cent of the cost of the property to obtain a mortgage. But a deposit of 25 per cent will allow you to get a better deal.’
2. Speak with a financial adviser
‘It’s never been more important to protect your finances’ Nima emphasises. ‘Therefore, if you’re looking to purchase a home during this time, I suggest you speak with a financial advisor. Using a financial advisor and their expertise will ensure you get the best possible mortgage for your circumstances at the best possible rate. They’ll also help you to navigate the market with it being your first time and explore different options.’
3. Shop around
‘Recessions lead to job and income losses and there are consequently less people looking to invest in something as expensive as a new home, meaning house prices generally fall during a recession’ Nima explains. ‘Although this can cause issues for sellers, lower prices mean it can be easier for people to get on the property ladder and buy a home, especially first-time buyers.’
‘You may find current homeowners are willing to lower their asking price to sell their home as quickly as possible. Which also means you can get a great price on a property during a recession. However, you should be wary of these cheap house prices before committing to buying the property’ Nima warns.
‘Although it may seem like you’re getting a bargain, not every home selling for cheaper will be a good deal. Generally, the lowest-priced homes will require many repairs that will cost buyers in the long run. Be wary of this when looking to buy a cheaper home as you may end up spending thousands on big repairs later.’
‘I advise thoroughly checking out the property before you commit to it and ask important questions to determine how much work the property needs. Don’t get swept away in a low house price or jump at the first-rate a mortgage lender offers. This is a big decision and one that needs to be thought about carefully.’
4. Make a checklist before you view a property
‘Your first house viewing can be exciting and likely, you’ve already been won over by pictures of the property you’ve seen’ says Nima. ‘But it’s important to never take a home you’re interested in buying on face value. Try not to get carried away by excitement – you should be thorough with your house viewings to make sure this is the right home for you.’
‘Check for factors including if the doors and windows are secure and efficient. (Check) If the current owners have experienced disputes with neighbours. If there is any damp or holes in/on walls, are the electrics/plumbing up to standard. And are there any structural issues. Having a checklist prior to your viewing will ensure you cover all of the important factors.’ sound advice from the property expert.
5. Be patient
‘As I mentioned previously, don’t rush the process’ offers Nima. ‘It may take your several months to find your ideal property, and that’s okay. Transactions can take a while too. Purchasing your first home is probably one of the biggest financial commitments you’ll ever make, so it’s very important not to rush it.’
When it comes to such an expense as that of a house, we say buy wise.