In the growing UK real estate market, a buyer’s market happens when supply exceeds the demand. It means, there are more houses being sold than the number of people looking for homes. There are indications that a buyer’s market is happening now in the UK and first time home buyers and real estate investors should be fully prepared for it.
There are factors that trigger a buyer’s market, such as economic conditions and time of the year. As an example, because there are fewer buyers, sellers often lower their prices. They may also offer favourable contract terms to incentivise buyers. A buyer’s market is a good opportunity for real estate investors to increase their asset portfolio by obtaining good houses at lower prices. The benefit of a buyer’s market for regular home buyers is evident as well. They may obtain houses with easier mortgage terms and lower interest rates.
Keeping that in mind, let’s take a look at some of the common indicators of a buyer’s market:
Home Prices- when home prices are becoming more affordable, this could indicate a buyer’s market. If the average house price in an area was £180,000 in 2012 and it’s still £180,000 today, it could indicate a buyer’s market. In an ideal market situation, home prices should increase gradually. Real estate investors and regular home buyers should check whether properties are being sold at bargain prices.
Lower Interest Rates- when regular home buyers get a mortgage, they will need to put down 20% depending on the terms. They also need to pay for principal and interest for 25 years or more. An important component of any mortgage is interest rate. If the interest rate is two percent lower, homeowners may save more than £15,000 for a house valued at £230,000. Any calculation should be corrected for inflation to determine that real values of the house and the loan. The bottom line: If home buyers are spending less per month for mortgage, it may indicate a buyer’s market. Mortgage providers may seek to attract more home loans by offering lower interest rates to home buyers.
Contact Trevlyn Properties
To learn more reasons why property experts believe it’s a buyer’s market, contact Trevlyn Properties today and speak with an estate agent who can answer any questions you might have.
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