To buy or not to buy!

We have all heard the doom and gloom, the housing market has crashed, it is worse than the 90’s, you shouldn’t buy, you shouldn’t sell, it is going to get worse before it gets better…..

What is Happening Now?

Let me dispel some myths and put what is really happing in the market into English.  When people put money in their saver accounts, the bank or building society pays interest on that money.  However your money does not sit there unused in a little corner of the bank waiting for the day when you want to draw it out.  Basically the bank borrows it and lends it to other people in the form of loans or mortgages and they charge a higher rate of interest for lending than they pay you for saving.  So you pay in £1, they lend your £1 to someone else and charge them 10p, they pay you 5p in interest  and the bank makes money by keeping the remaining 5p.

This worked well for sometime, however over recent years the banks have overstretched themselves.  They lent people more and more money and when money from savers started to run dry, they started borrowing money from America, however they also ran dry and the first casualty was Northern Rock.

Can I Get a Mortgage? 

The situation now is lenders are being much more cautious than they have in the past and they are being very strict about who they lend to, but they are still lending and there are still mortgages available, if you know where to look.

So if it is still possible to secure a mortgage, why have people stopped buying?

Most people rely on the news and papers for their information and lets face it, its all bad news, but since when did good news sell papers!  You will only ever really hear one side of the story and the majority of people do not know enough about how the mortgage market works, so they follow the crowd. 

House Prices are Still Falling?

Why are house prices lower?  A housing crash such as it is, is very artificial.  People are very keen to secure the money they have in their houses and therefore they have stopped selling.  The only people who are selling at the moment, are those who for one reason or another have to sell, whether it is because of work, separation or they have run into problems and are forced to sell. 

Desperate times call for desperate measures and they often sell considerably under market value.  So you have a street of houses valued at around £120,000, one person on the street gets into trouble and sells at £90,000 just to get a quick sale and shed their problem.  All of a sudden, all the houses on the street are only worth £90,000, but that is not the case, the value of a house only becomes real at the point at which you sell it.  So if everyone else sits tight, ignores what's happening, in a couple of years houses will be selling on the street for £120,000 again and actually they will pass through this time completely unscathed.  Who wins here, the person who bought a house for £90,000!

Savy investors all over the country are snapping up bargains and if you are waiting you are missing out.  There is not going to be a big news flash, saying house prices have hit rock bottom and next week they are going back up, get out there and buy a house now!

Developers have already shut down at least half of their sites, people are not putting their houses on the market unless they are have to and this is causing a signification shortage.  This is good news for home owners because eventually this will force house prices back up and when it does you can expect a repeat of the hysteria of the early 90’s, when people were gazumping each other in an effort to secure a property and buyers accepted whoever came in with the highest offer.

What Does All This Mean?

Look, think of it like this, when Next have their Christmas sale, when is the best time to go?  If you want to browse around in peace and quiet and secure the best deal, without being run down in the mad rush, you need to be there when they open the doors at 5am.  You can get what you want, in the size you want, without someone trying to grab it out of your hand.  If you wait until 9am 10am, mad people all over the place loading up with as much as they can carry, whether it fits or not!

Now is the time to buy, do not miss this opportunity to secure a great deal, with so few people wanting to buy or unable to buy and so many having to sell, you are missing out if you don’t take action now, click here to receive our information pack and application form and leave everyone else standing!

There is never a bad time to buy only a bad time to sell.

Kind regards

Will Brown

Company Director

 Forces Homes Supporting

Bridging the gap!

Address and Registered Office

Forces Homes Ltd

Borough House, Borough Road, Gallowfields Trading Estate, Richmond, North Yorkshire, DL10 4SX

 Tel: 0044 (0)1748 821118     Fax: 0044 (0)8708 386 562     Email: enquiries@forceshomes.co.uk

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