There’s no denying it. The current cost-of-living crisis has put pretty much everybody in a terrible position. With that in mind, what you’re about to read isn’t an attempt by a Guildford mortgage broker to add a generous dose of gloss over what is a very real and difficult situation.
It’s perhaps just a different way of looking at the current bump in the road.
So, bear with us and read on.
The problem with falling house prices
It goes without saying that nobody wants the value of their property to fall. And, as it stands, there isn’t any empirical evidence to suggest that this is what’s happening in response to the UK’s current economic troubles.
In fact, In Your Area recently reported how house prices have risen 0.9% since September – so quite the opposite.
However, what do you do if, as some analysts are predicting, prices fall by 10% in 2023?
Keep calm and carry on
Let’s say your property was valued at £500,000 at the beginning of October 2022 and you would like to move to a larger property valued at £750,000.
Let’s also say that it’s now spring 2023 and, after having it revalued ready for sale, the agent suggests that your property is now worth £450,000 – 10% less than what you’d hoped for.
It’s not ideal, of course. However, just as your property has dropped by 10%, it’s quite likely that the £750,000 property you’re hoping to purchase has just dropped 10%, too.
This would deliver a £75,000 saving, taking the property down to £675,000, and leaving you with a net gain of £25,000. That £25,000 saving would not only cover your stamp duty (£21,250 at the time of writing), but it would also cover a fair chunk (if not all) of your legal fees.
Move forward, move home
Yes, the economy is undoubtedly in need of some TLC. From a homebuyer’s perspective, that might just involve considering the overall picture rather than letting panic take over and deciding not to move until things are back to normal (whatever that looks like these days).
We’re not suggesting that you throw caution to the wind and make poor financial decisions. But a conversation with an experienced mortgage broker is definitely worth the time.
To discuss getting a mortgage during these uncertain times contact our team of Guildford mortgage advisers on 01483 238280 or by e-mailing info@complete-mortgages.co.uk.
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