by Mark Johnston
Although the continued struggling housing market is bad news for many home sellers, some are looking to take advantage of the situation. The Building Societies Association (BSA) are suggesting that the current slump has created a great opportunity for buyers looking for a good deal.
Mortgage broker, David Hollingworth of London & Country, said: “Much depends on what the motivation is for buying. If you are expecting a sharp increase in value, then you are going to be disappointed. All the indications are that this is not going to happen for the next year or so. At best prices will be flat, and they may even go down over the year.”
Most experts still think it may still be a gamble, investing into a market that is on the decline although others see it as the a hidden opportunity to take advantage of the current position.
David Hollingworth went on to say: “Conversely this could be a good time for those either looking to get onto the property ladder or upsize.”
Although falling house prices may seem like most people’s worst nightmare, it’s worth remembering that it does create a buyer’s market. Even those looking to move house can benefit or at the very least minimize any exposure. Home movers seem to worry about house prices falling but if they are not looking to move, then why worry. At the same time those looking to move may loose on the sale of a home but gain when buying especially if they are looking to up size at the same time.
Mr Hollingworth went on to say: “This is definitely a buyers’ market and is likely to remain so for the time being. Those who are in the position to buy a property should certainly make the most of this opportunity, and if you plan to live there for a while – or even hold a buy-to-let property as a long term investment – then modest price falls over the next year shouldn’t make much of a difference.”
Melanie Bien, a director of Private Finance, the broker, said: “There will definitely be some fantastic opportunities out there. The problem will be securing the mortgage finance to do it.”
The mortgage market is still struggling and is one of the major contributing factors to such a slow housing market. Most professionals in the industry are predicting that this will be a theme that runs throughout 2011 as banks and building societies continue to come to terms with the financial crisis and the results of the FSA’s mortgage market review.
The will still be some people able to take advantage of the current situation, those will large savings or hefty cash deposits will be able to secure lending a lot easier as banks are looking to take as little risk as possible to ensure their balance sheets remain healthy in these difficult economic times.
With the most basic mortgage requiring at least a ten percent deposit and the cheapest deals needing at least forty percent, its still tough times ahead for most. But the continued low interest rates and falling house prices may well mean that some borrowers are able to secure a great deal on the property of their dreams.
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