SCHOOL’S OUT FOR SUMMER
As all parents will know, this is the week that the schools break up for their long summer break – and so for many families, this weekend will be the time to pack up the car and take off on holiday. If that is you, I hope you have a relaxing time, and that the sun shines on you, wherever you are headed.
For the housing market, the summer is traditionally a slower time, as people’s attention turns to the beach. It is no coincidence that September is often a time when we see a ‘bounce’ in the market.
In the light of this seasonal trend, I have two pieces of advice for you today; these ‘nuggets of wisdom’ are common sense really, but that does not make them any the less relevant.
The first is this: an autumn bounce, in the context of the current rising market trend, will undoubtedly lead to upwards pressure on prices. Now, you might reasonably expect someone whose job is selling houses to say this, but there really is some logic in not waiting until September if you are considering moving.
During the quieter summer months, you will be among a smaller pool of buyers, and that means that you will find a subtly warmer welcome. Sales people will have more time to devote to you, and will be working doubly hard to help you find the house of your dreams. The laws of supply and demand also mean that you will probably get a better deal than if you wait until the autumn bounce, and its inevitable effect on prices.
But even if you don’t want to start looking just yet, you do need to be thinking about your purchase right now, and this is my second tip. The new mortgage affordability rules mean that lenders are taking an almost forensic interest in borrowers’ spending; given that the summer holidays are often a time of high expenditure for many, that means that the autumn is potentially a difficult time to be applying for a mortgage.
There are two things that you can do to mitigate this. The first is to apply for a mortgage right now, and get your offer in the bag. In general, mortgage offers last for at least three months, and often longer, so there is no reason not to apply now, before all your summer holiday expenditure is incurred.
The alternative, of course, is to make sure you don’t go mad over the summer, and in particular to resist the temptation to let your credit cards take the strain while you are away. Whilst holidaying on a budget can curtail the fun, overspending can mean that you risk not getting the mortgage you need for the house you want – and that will have an effect for years.
That said - Happy holidays!
Twitter: @tonyabel