Will Leyland, 09 November 2022
With the housing market currently in a state of flux at the moment, many are deciding to delay their plans on buying a new property - but could it actually be worth looking to rent in between buying a place?
House prices are becoming quite volatile in the current climate thanks, in part, to some very questionable economic decisions made by the previous government and the treasury when Liz Truss and Kwasi Kwarteng were in charge.
The announcement of their mini-budget just over a month or so ago caused the markets to have a mild panic attack and eventually brought about the downfall of the government before Rishi Sunak and Jeremy Hunt took over as PM and Chancellor respectively.
The markets have since calmed down, but there are warnings of some tough times to come, and this appears to be applying downward pressure on house prices in the UK and that has left some that are currently looking to move a little unsure about their best next move, but what if you were to rent in the meantime until things settled down a bit?
So, what’s the argument for someone to rent in between buying a property?
Ultimately it boils down to the simple argument that if property prices are set to drop, but you don’t want to wait to buy at the top of the market now, then it could make sense to wait for prices to drop a bit before the end of next year.
Of course, renting won’t come cheap, but let’s say for argument’s sake that you’re looking at selling your property now for £250k, and the houses you’re looking at are around £300k, but prices are set to correct somewhere in the region of 15% in the next 6 months or so, then what will that mean in real terms?
It would mean that you’re getting a huge £37.5k more on your property, as well as £45k saving on your next property. With a potentially combined £82.5k in savings, it’s well worth considering in the short term, when the average rent sits at around £1k per month.
If, for example, you rented for 6 months at that price, you’re still saving an enormous £74.5k overall.
Of course, it should be said that nothing is guaranteed with the UK property market, which has been remarkably solid even through the pandemic and beyond.
When discussing this issue in the Daily Mail, Graham Norwood says “Selling your property first puts you in a stronger position as a buyer — you are not in a chain so are more attractive to the seller of your next home — and it means you won’t be hassled into selling in a panic for a lower price than you want because you have an offer pending on a new home.
In addition, if you’re relocating, you’ll want to find out which are the best streets in the new area, and renting gives you time to do your homework. But it is no longer a cheap option and its cost will vary depending on property size and location.”
If this is something you’ve been considering, then why not get in touch with us today to discuss what you’re looking for when you’re considering doing it, and what sort of size property you need?
We aim to put the enjoyment back into the lettings experience and have homes of every type available across the country, whether you’re looking for a three-bedroom house in the suburbs or a stylish inner-city apartment, your next home might be right here.
As experts with years of experience in the market why not let us help?
Will Leyland, 09 November 2022