Finance > Real Estate > The Credit Crunch and the Benefits of Renting
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Article rating : 0.00, 0 votes. Author : Terry Lucking
Other than folk who have been hibernating for the last few months I think it is fair to say we all know property sales have slowed. At least the exciting end to the European championship football having three British clubs in two finals gives the newspapers something else to deal with rather than continually analysing the housing market and talking us into doom and gloom.
The current drop in confidence in our housing market and the changes in the mortgage market is opening up great deals for prospective buyers. Vendors (those selling) have had to drop their asking price to get an offer. So vendors who have to sell have to take offers against the asking price. The next difficulty is finding a suitable mortgage and a getting valuation for what price was agreed. Many current valuations are not reaching the agreed sale price, which means the buyer has to try to negotiate a lower price.
Given we currently have lower house prices you would expect it would be easier for FIRST TIME BUYERS to buy. This is what the headline writers have been saying for months.
Well it isn’t working like that. A major reduction in the number of mortgages on offer combined with tougher loan qualifying tests and larger deposits has actually made it more difficult for FTB’s to buy!
Something to learn from this is that lower house prices doesn’t automatically mean it will be good for all FTB’s.
Why do we need to own a house?
Why do we need to own the house we live in?
Many people will have different answers. If you decide owning a house is important DO YOU need to own the one you live in to benefit from the property ladder? In my opinion the answer is NO
You can buy an investment property in another area and let it to renters. You could buy more investment properties in the future as the value of the first one you purchased increases. You could use these investment properties as part of your pension planning.
Many people think their own house will be part of their pension. If your strategy is to sell this house what are you going to live in??
Buying a house in another area may actually mean that FTB’s can
afford to buy and benefit from the property ladder………just not live in it themselves.
A rethink in how you can use your money what you own and what you live in maybe useful for many people and families.
Renting offers many benefits;
o Predictability of annual costs; more accurate budgeting
o If your job takes you to a new location you can move quickly
o If your family numbers grow or reduce you can up or down size quickly
o Move quickly to reduce your outgoings
o A wide choice of houses and apartments in various sizes in most locations
o Better value for money
Renters are protected now more than ever before. For information on tenants rights and responsibilities have a look at our central government website: http://www.communities.gov.uk/housing/rentingandletting/privaterenting/tenantsrights/
Tenants should select their landlords and agents carefully. Don’t just choose the property and forget to ask the landlord or agent some key questions. The recent issue with Keyhole Property Management Ltd is a classic example. Be confident and ask searching questions. If the landlord or agent is unable to answer perhaps you should look for a different property.
The choice of properties available for renters is wide and landlords have to invest to make their properties attractive to prospective tenants.
Length and security of tenure can be negotiated with landlords or their agents. Spend time planning and discussing what you want. You will find most landlords will be cooperative and welcome polite discerning customer (tenants).
So renting can open up new opportunities enabling faster and more flexible solutions when dealing with today’s fast changing demands and lifestyles. It does not mean you are not on the property ladder or able to benefit from future capital growth the UK housing market may have to offer.
I recommend that you find a good local property letting agent who will not only give good information about the rental market in his area but also be able to advise about best areas to buy properties for renting.
Terry Lucking is Managing Director of Belvoir Property Lettings Peterborough, which has the largest range of properties to rent in Peterborough. He started this business in 1999 and it is now the leading lettings agency in Peterborough, Oundle and Corby UK. He can be contacted on +44 (0) 1733 321500, email terry.lucking@belvoirlettings.com
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