This Week in Property: The Latest News (9th April 2021)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
To rent or buy: that is the question
A few years ago I made a pilot for a TV programme where I would advise people whether to rent or to buy a property and I suspect one of the reasons the show never got made was that the answer is too simple and black and white and can be calculated to the penny – if you’re just looking at the money angle (which I was!) – and there’s no jeopardy or emotional angst in that.
It’s possible to calculate the cost of buying and a mortgage and compare that to the rent (and deposit needed) to work out what is cheaper: to rent or to buy.
At the moment the buying option wins hands down and it’s just been calculated by the Halifax that the average cost of buying a property is £800 per year cheaper than renting in the country overall and £4,606 cheaper in London and so buying is the best option currently – if you can find a property that is.
This is because mortgages are really cheap at the moment and rents are rising due to an excess of demand over supply. Of course over the long term buying will always win because you then have the increased value of the property asset to be included in the calculations and over the long term property has always risen, so there is only ever any real choice or dilemma in the initial period – and there’s no real emotional jeopardy in that for a TV show and where the answer can be calculated to several decimal points.
Shame though, I would have loved to make a TV programme based on facts and numbers rather than the emotional rollercoaster that property buying tends to be for most people.
Covid raises your temperature – and property prices
One of the less predictable symptoms of Covid 19 has been the rise in property prices over the past year and it’s fair to say we are in a property frenzy at the moment.
Rightmove tell us that there are 6,300 hits per minute on their site; more sales were agreed on the 23rd March than any other single day in the last 10 years; there are apparently 50 buyers for every home valued over £2m in the Cotswolds and rumours of people paying substantial non refundable deposits of £10k or more just to make sure they get an option to see and offer on a property (all figures from the Sunday Times 4th April 2021).
That’s all crazy news but will the property pandemic continue when the Covid pandemic starts to ease?
It’s difficult to see it slowing substantially. The extended stamp duty holiday and 95% mortgages will boost the bottom of the housing ladder which then knocks onto other properties higher up the price scales.
Supply has fallen partly because the builders haven’t really been out in 2020 building as fast as normal and yet demand has rocketed. People want to move as their working situation has changed permanently and people have also re-prioritised wanting gardens and open spaces, offices and home work out areas.
This is all great news if you’re already a property owner as the value of your asset has risen, but of course, it’s bad news for anyone not yet on the property ladder as the prices keep rising whilst opportunities fall.
My prediction is that the situation isn’t going to change much in 2021 and we will see prices continuing to rise so for the first time buyer I suggest you take advantage of the government help while you can. The property market is going to stay hot for a while yet.
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