Written by Philip Macdonald.
What is especially interesting at the moment is the way that people are being creative with their budgets, thinking long term for the first time in a decade. Whereas previously buyers clambered onto the housing ladder, with whatever mortgage they could get, without really considering their future needs, they are now very much aware of the necessity to plan ahead.
Those of us old property hands have always been cautious about short termism, but in a boom, people can get carried away with the ambition to ‘buy something’, not always choosing the most appropriate property in the right location, nor at the right price. Nevertheless, if they find themselves in negative equity, as some will, their home will eventually catch up with a rising market.
In the meantime, those who are on the move are reflecting on their future lifestyles and grasping opportunities to invest in bigger and better properties than they could have expected to afford at this stage in their lives, even a few years ago. Instead of moving several times over 10 or 20 years to achieve the ideal, they are looking for – and buying – a lifetime property now.
Whilst I would never recommend anyone stretching themselves to the hilt of their finances because you always need reserves for maintenance, household bills, furnishings and the unexpected … buying a large property offering scope to let rooms is a good option.
Friends, students, actors and businesspeople all need temporary accommodation, whether for term time, the duration of a play or for weekdays – and can be a good source of additional income to support mortgage payments or improvements. Over a couple of years, as your own financial position improves and your family grows, you can dispense with lettings, and use the vacated space.
Equally, acquiring a property with more acreage than you actually need means that you can let a field or two for grazing or cultivation; unused outbuildings could also be let for a variety of uses, depending on their condition. However, informal arrangements are risky, so make sure you have legal agreements and appropriate insurance.
But first, do your research before taking the plunge; make a list of essential requirements, but be prepared to be flexible.
Meanwhile, the market. My personal view is that prices will remain pretty consistent over the coming year, as they have held up during the last 12 months; having levelled off, confidence will continue to grow.
Philip Macdonald is managing director at Abbotts on 01284 704815.