Buying or selling a home at this current point in the market certainly comes with a large number of considerations, but the biggest one to ask yourself is if you should buy or sell your home first.

There is no straightforward answer to this complicated dilemma either. Both certainly have risks as well as significant advantages. It will all come down to you having the time, money and patience.

Buying and selling a home is typically a long and unpredictable process and it requires a lot of thinking ahead. The decision you make not only affects you but also your family if you have one. You have to look at your situation, your finances and how much time you have to make it work.

Where You Are At

There is no correct way of approaching the property market, which is why you need to keep options open to ensure you don’t miss out on the right situation.

Where you are currently situated will play the biggest influence on either buying or selling first. If you sell your house first, you will need to assure you have temporary housing whilst you wait on the new property to become available to move into or comes onto the market. Moving twice can certainly be a doubly stressful experience so you need to decide if this is something you want to put your family through.

Single people may not mind the wait in temporary accommodation and feel comfortable renting a property until the right home becomes available.

Your Finances

Finances play an even bigger role – especially following the era of uncertainty that the pandemic produced on employment. If you decide to sell before you buy, you will need to factor in rental costs for a temporary property.

If you buy before you sell, there are also financial implications as to do so you will need to qualify for two mortgages, and your debt-to-income ratio to make this work may be too much of a stretch. If you have the finances to make buying before selling work, it certainly can be beneficial – though far less common.

Your Time Permitting

The time you are working with is just as important as the above, as many people have a set timeframe before things get complicated. Selling your home first can ensure a quick sale, whereas buying a home before selling gives you more time to find the desired home.

Selling first certainly puts you in a powerful spot for negotiation on the asking price, and that not only puts you in a favourable position with buyers but also provides you with a price range from your sale that helps you find an affordable home.

Buying first affords you more opportunities to view more properties to hopefully secure your dream home, and as house prices rise you still have a home until things begin to calm down.

Contact the team at Joules Estate Agents Stockport for information on how to sell a house or if you are looking to buy property in Stockport.

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A vast number of buyers are being cautioned to act with haste to secure decent mortgage pricing as the mortgage interest rates have topped a 13-year high as of the beginning of May.

High-Rise

At the start of the month, the Bank of England’s Monetary Policy Committee increased the base rate to 1% from 0.7% and – with it expecting inflation to hit 9% over the next few months from its previous 8% forecast – it looks likely to hit 10.25% by December. This foreshadows potential interest rate rises in an attempt to bring those rates down.

Estate agents Stockport are not heralding an immediate market impact as a result of the latest hike, but warnings to buyers that it may start to get a bit harder and have a lot more expensive on the mortgage side have been raised – especially with the rising price of bills.

Anxious State

The influence on how much buyers are comfortable paying for a property may be highlighted from this shift, as well as what type of home they have on the radar. With continued lack of stock on the market being the biggest issue, buyers are in an anxious state.

They are not as anxious concerning the rising house prices and mortgage rates, but more with the limited choices to choose from. Buyers who are on the hunt for a mortgage appreciate that while rates are on the rise, they are still incredibly low at this point.

The now regular increases in interest rates, as well as the seemingly-weekly adjustments in mortgage rates and the escalating costs associated with living, are undoubtedly looking to impact the housing market at some juncture around the corner.

First Time Buyers

First-time buyers look to be hit in all directions by rising rent rates, higher interest rates and more stringent lending criteria. Whilst they look to come off with the sharp end of the stick, they also play a very vital role in the housing market’s operation from the bottom of the ladder straight to the top.

As the later year sees further interest rates rise, demand is not predicted to be affected – especially amongst the higher loan to value mortgages from first-time buyers. This may slow price growth in areas supported by these buyers, where lower disposable income margins get hit by increased living costs and affordability is affected by mortgage interest rates.

Prices are not expected to fall with the labour market being strong and interest rates remaining at their historically low levels.

For more information on where to buy property in Stockport or how to sell a house, contact the team at Joules estate agents Stockport today.

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The current word in the housing markets is centred around mortgage applicants likely setting to find it much harder to be approved for loans as the continuing cost of living crisis causes banks to tighten the reins and walk the fine line of caution moving forward.

Current Issues

Current issues with inflation and rising bills are set to lead to lenders having to introduce a set of tighter and more stringent checks on applicants for home loans. This, just days following Santander being the first to announce their change in lending criteria moving forward, should be an indication of how banks are set to follow.

Responsible lending is viewed as vital to the health of the property market and lenders changing their criteria is easily identifiable thanks to the huge increase in living expenses faced by everyone.

Many homeowners are now finding themselves facing a similar position to tenants that didn’t earn enough income to buy but have ended up paying even more in renting costs than a mortgage would cost. Owners also may not be able to re-mortgage to reduce their monthly outgoings as a result of the shortfall in disposable income after their money has been spent on the increased bills.

Viable Option

With interest rate rises also hotly anticipated, many are turning to their banks and brokers to see if a mortgage is a viable option at this point. Those under the banner of self-employment are at considerable risk as they pay themselves lower wages or dividends to keep their taxes low.

Banks are now actively implementing new stringent stress tests on lending with the increasing interest rates, checking if borrowers can afford a standard variable rate plus 3%. Affordability checks and heightened stress tests could severely affect the housing prices, resilient since Brexit, Covid-19 and the invasion of Ukraine, as well as the costs of living in Britain.

As Halifax has reported, average house prices hit a record of £282,753 in March 2022 – a tenth higher than a year previous. This was the biggest annual leap since the offset of the financial crisis.

Warnings

Mortgage brokers warned that soaring costs of energy bills, tax rises and goods have prompted banks to pull a tight leash on their mortgage affordability tests – resulting in it becoming much harder to borrow as much.

Santander made it tougher for borrowers to meet the lending criteria by telling their brokers it would reflect rises in household bills, National Insurance and taxes. The largest high street banks – such as HSBC, Barclays, Lloyds and NatWest – are considering similar motions, with punitive checks making it more difficult to take out larger loans. Many people stand at risk of being unable to purchase their desired home.

For more information on how to sell a house, or if you are looking to buy property in Stockport, call the team at Joules estate agents Stockport today.

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