The clock is ticking for FTBs

By Philip Macdonald, managing director of Abbotts:

philip macdonaldAccording to the Halifax, ‘more sales are taking place, and more mortgages are being approved. Alongside the Nationwide, the Halifax also records price increases in recent months, but expects them to be ‘broadly stable’ throughout the rest of the year. With interest rates at 0.5%, and little chance of the Bank of England tightening monetary policy in the near future, although some commentators expect a rise of 0.75% during 2010, prospects remain encouraging for the housing market. First time buyers have certainly been out, capitalising on the opportunities, but the clock is ticking if they still want to take advantage of the government’s two flagship measures: the 1% stamp duty threshold is expected to return to £125,000 (down from £175,000) at the end of the year, whilst VAT will increase to 17.5% at the same time.

So, if you’re planning to buy a property in this price range, you have just three months to avoid the extra charges! With prices at today’s levels, buying is cheaper than renting, and brings big benefits (as well as responsibilities). In all my years in the industry, there is no doubt that

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property has proved to be a good investment over the medium to long term, meaning owners have an appreciating asset. But, a home is somewhere to live and bring up a family, not a money pot against which to keep borrowing – for the new car or holiday.

This is where so many people went wrong in the last few years, building up debt whilst reducing their equity in the expectation that prices would continue to rise. They will rise again, but we all need to reassess our relationship with property and why we want to own one! There are some excellent buys available at the moment, and they are being snapped up virtually as soon as they come on the market: both new and old, in sparkling condition, or needing a bit of updating and a lick of paint. To find the best option for your own circumstances, it is important to a). establish a good relationship with a reliable and professional agent, and b). discuss funding arrangements to maximise your budget.

Also remember to consider all the costs which will be incurred, from legal and mortgage fees to removal charges, as well as expenditure on essential items. First time homeowners will need kitchen equipment, towels, bedding, as well as basic furnishings. Some can be begged or borrowed (most family’s lofts will be a good source!) whilst others can be acquired at low cost through charity shops. But do ensure that any soft furnishings carry the fire safety mark. You will also need to be insured, both building and contents. And don’t forget the weekly food bill and utility costs, plus travel and entertainment. Now really is a good time to buy, and to take advantage of the extra savings which end in just three months.

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