With the property market in turmoil, buying your own home could be money down the drain. That’s the stark warning for would-be first time buyers from Martin & Co, the UK’s largest specialist letting agents, who have just launched a nationwide campaign to promote private renting as a real alternative to house purchase.
The campaign, which highlights that UK house prices follow a predictable cycle of rising prices followed by periods of decline is being launched simultaneously right across all 170+ Martin & Co offices in the UK.
The plain fact is, house prices are dropping fast, and we think the evidence is that they’ve still got some way to go – anyone buying now will be looking at an almost immediate loss. Any advantage to first-time buyers in terms of reduced prices is being more than outweighed by the fact that banks and building societies are demanding larger deposits – typically around 13%, according to the Council of Mortgage Lenders.
The net result of all this is that first time buyers are struggling to save for longer – only to face the possibility of moving into negative equity almost before the ink is dry on their contracts!
Fortunately, the way out of this nightmare scenario is an easy one: demand for private rented accommodation is soaring, you can move into a new place for a fraction of the up-front costs of purchase. If you already own a property then you could let it out and find a place to rent for your own needs – perhaps to allow you to relocate or for extra room for a growing family. You could also experiment with a different style of property to see if you like it, without risking having to make a long term commitment”
In line with many industry experts, Martin & Co sees this trend as heralding a major structural shift in the way we think about property. The company points out that there is nothing sacrosanct about owning your own home – indeed, it was only as recently as 1971 that owner-occupation passed the 50% mark in Britain. Up until then, renting had always been the norm – as it still is in most parts of continental Europe, where people appreciate that there are far more important things to do with their money at some points in life than tie them up in bricks and mortar.
Buying property is still a great long term investment. But it works best when you buy at the right price and have tenants pay the mortgage. Buying an over-inflated property for your own occupation can be a trap that it takes years to escape from.
At Martin & Co. Staines, we have years of experience at lettings, so let us find you a property now. Call us on 01784 495660.