Traditionally, autumn is one of the best times of year to put your home on the market. The garden chairs are tidied away in the shed, the children are back at school and you, meanwhile, can look forward to celebrating the New Year in front of a brand-new hearth. This year, however, is likely to prove an exception to the rule as a number of conflicting trends are affecting the market. Statistics show that only 2.6 million people will have moved since the credit crunch. This build-up of demand, coupled with low interest rates, would normally move the market forwards. Confidence is low, however, as mortgage lending is in short supply and capital growth has slowed to a snail’s pace. These factors combine to create a sluggish market and London alone is bucking the trend. Fortunately, Surrey, which sits in the A3 wealth corridor, is benefiting from an uplift on the back of London’s continued growth, and overall the county is outperforming the market, with prices projected to rise by up to 28 per cent over the next five years.
So, is this September the right time to move? If you are a London homeowner looking for better value for
money, the answer is probably yes. Suburban family homes are still rising in price, which makes what Surrey has to offer look very attractive. For example, a 2,000 sq ft fourbedroom home costing £1.3 million in south west London can still be found in Guildford for around £900,000. Unfortunately, the picture looks different for first-time buyers, and secondsteppers. Interest-only mortgages are increasingly rare and deposits are rising. Today, a homebuyer earning £32,000 will need a deposit of around £26,000 – a large slice of annual income. It’s not surprising, therefore, that the under 35s own less than five per cent of the UK’s property equity.
A silver lining
The silver lining in this particular cloud is that this could be a good time to invest in a rental property.
UK rentals have increased by over one million since 2005 and, although capital growth may not be what it was, rental income is still strong as people step off the housing ladder, at least for the time being.
Also, if you’re selling, your home stands a strong chance of getting noticed as fewer properties are currently coming to the market. Another plus is the fact that cash buyers have increased to 36 per cent.
This means less reliance on the quixotic mortgage market and it is likely that it will be the cash buyers who will eventually lead a return to growth. In summary, although the selling cycle is taking longer and it is harder to find the right property, September could still be a good time to buy. We don’t know how much longer we’ll be cushioned by low interest rates and, if you’re patient and are in a good position to move, you could buy at a better price than this time last year.