A Cheshire-based residential conveyancing specialist insists that slow and steady is the ideal combination in the property market.
However, the UK is currently amidst a property boom with house prices on the longest run of monthly increases since 2016, according to reports.
The average cost of a home is now a record high of more than £286,000 following a run of 10 consecutive monthly rises.
Compared to this time last year, the average property is up more than 10 per cent, while homeowners are enjoying a near £50,000 increase in the price of an average property over the last two years.
Watsons Solicitors partner and residential conveyancing specialist Chris Illingworth explained: “Whilst it isn’t possible to say how long the boom will continue, or whether there is an upcoming crash, it is definitely a time to keep a close eye on things.
“When there is a boom like now, people can overstretch to move house, whereas when there’s a crash people decide to stay where they are, and this reduces the supply of houses onto the market. This can be a trigger in prices coming back up in quick order, as property investors look to snap up a bargain.
“Slow and steady in terms of property values, either up or down, is what you need to have confidence in the sector.
“It is great seeing your house value rise by say 15 per cent, but then when you are looking to buy your next house you find that has gone up by at the same rate.
“Things are fine until the cost of buying a house outstrips what you can afford financially and then, across the whole market, price rises stop, and they come back down.”
A potent combination of a worldwide pandemic and the increase in people working from home has helped fuel the property boom.
The stamp duty holiday, which ran from July 2020 to September 2021 following several extensions, has also played a significant part in creating a vibrant market, even with the cost of living continuing to rise.
Chris said: “The rate rises haven’t appeared to slow things down, although that might change with the cost of living rises seen over the last year.
“But in recent months there haven’t been enough houses on the market for people looking, so while the rate rises might slow things down, it won’t fix the issue of there being more people looking to move than there are houses.
“I’m constantly hearing the story of people looking to move house, but when they put an offer in on somewhere that property is already sold, or they find out it has been snapped up for over the asking price.
“After a considerable amount of time working from home it was only natural that people explored the idea of moving into a bigger house.
“A lot of people were also able to save the money they spent on commuting or going out and they’ve decided to put that towards either getting on the property ladder or moving to a bigger home.”
Chris worked in the sector at the time of the 2008 property crash, sparked by low-interest rates and low lending standards that fuelled a housing price bubble and encouraged millions to borrow beyond means to buy homes they couldn’t afford.
He continued: “Lenders are much more stringent now in terms of checks they put in place when people apply for a mortgage as they factor in a variety of costs.
“The cost of living has gone up, from council tax to water, gas, and electricity bills, and that will be taken into consideration.
“The negative equity that many people found themselves in during the 2008 crash will live on in people’s memories. Fear of that can mean people pull out of purchases now.”
“In general, it’s important to be realistic with what you can afford and work out what you might be cutting back on or giving up because of buying a property.
“It took many years for the property market to recover to the same levels they were at, and there are still some flats out there that have never reached the price they were bought at.”
To speak to someone at Watsons Solicitors about conveyancing, please contact firstname.lastname@example.org or call 01925 571212.
Watsons Solicitors, which has been established for more than 60 years, specialises in family law, employment law, wills and probate, and conveyancing.
The team of experienced solicitors each hold various accreditations and memberships of professional bodies relevant to their expertise, while the firm’s partners oversee all areas of work.