Financially, practically and psychologically
The covid pandemic has turned the world on its head in so many ways. One of the most obvious ones where I’m living is how crazy the housing market has gone. It’s the same all over the country, and even internationally.
It’s no wonder people want to buy houses. Rent outside of London are soaring faster than anywhere else and the overall housing crisis is worsening all the time.
When everyone has been living in ‘survival’ mode for so long, and our homes have become our place of sanctuary, as well as our gyms, offices and everything else! It’s not surprising that so many of us want to put down firm roots and buy property. Many of those who already own theirs are looking to move up the housing ladder and gain more space, or perhaps move to a different area – for quality of life or family reasons.
Trouble is, it’s really easy at the best of times to get caught up in the emotion and excitement about purchasing a property. The pandemic has exacerbated this for so many reasons. The current housing market and general property shortage then just makes this worse, because we’re much more likely to make impulsive decisions. So, take the emotion out of it, get yourself a shiny new notebook, and get doing some serious thinking and planning!
Here are some of my top tips when thinking about house buying in the current times:
- Do you really want to move right now?
Despite everyone speculating over the economy and the housing market, no one knows what is going to happen! However, it is worth thinking about what might happen if they do – How to prepare for an interest rate rise (moneyhelper.org.uk)
2. Budget, budget, budget!
Not many people know where their money is actually going each month. You need a budget! I can’t emphasise this one enough. It’s important to see what your income and outgoings are doing – partly so you know, but you will also need to know this information for mortgage applications.
3. What are my priorities in the medium to long term? – Financial and lifestyle
Write these down! What other things are important to you? Children? Holidays? New handbags? Know your lifestyle and financial priorities.
4. Do you have any other options with your current situation(or your future one)? Lodgers? House share?
5. Is extending your current property an option?
This is a whole post in itself that I may come back to! But to start you off:
6. Is the government Help to buy scheme something you could qualify for? Affordable home ownership schemes – GOV.UK (www.gov.uk). Make sure you use a decent mortgage calculator (see below) to factor this in.
7. What can you actually afford?
Gone are the days when mortgages were solely based on a certain x your salary (although there are rough guides).
Get calculating what you might actually get a loan for. It’s no good guessing and then playing house monopoly! You may well end up disappointed; but equally you might find that you can borrow more than you think. (Remember if this is the case, you need to then match the repayments on the calculator with what you can actually afford on your budget). Have a look at UK Mortgage Affordability Calculator: How Much Can I Borrow? (mortgagecalculator.uk) to get you started.
So, quite a lot of homework, just to get started! But remember that it’s worth it. Nothing stays the same, and this awful pandemic has really taught us that. Don’t lose sight of what’s important to you – just think about taking a really careful approach and you’ll save yourself a lot of stress in short and longer term.
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