Buying and Selling in a Recession - when is the right time?
If you’ve been thinking about selling your house and buying a new one or, if you are a first-time buyer, it will not have escaped your attention that the media have been talking down the property market. They often publish stories backed up by surveys from major lenders and surveyors’ organisations detailing price movements. Perhaps it is not surprising after nearly two and a half years of record growth that we are now seeing a correction in the market. However, if you are thinking about selling or buying or just getting onto the property market, now might be a good time to move.
If you are selling and buying
If you have owned your house for more than, say, 3 years, this means you are likely to have made a substantial gain on your original purchase price even though the recent market reports show a reduction of a few percentage points in the growth rate.
When it comes to the purchase of your new house, you are unlikely to face the same high level of competition as purchasers have experienced over the last couple of years. Depending on the level of competition at any closing date, you might be successful in buying the house closer the asking price or Home Report value.
Of course, the current state of the market only affects those who are buying and selling. When the market is booming, you will get a higher-than-expected price – but when you then buy your new house, you will need to compete with other potential buyers resulting in you having to pay more for your new house.
When demand is reduced, whilst you might not get as much for your own house when you sell, it is likely that you will not have to pay as much for the new house you want to buy.
If you are a first-time buyer
If you are a first-time buyer in the current market, the reduction in competition makes it more likely that you will be able to buy your first home without having to pay a significant amount above the asking price or Home Report value. In addition, the Scottish Government recently increased the Additional Dwelling Supplement for buy-to-let property and second homeowners. This means those types of buyers will face additional costs when they compete to buy properties in the traditional first-time buyer market sector. It is now a much more level playing field for the first-time buyer.
If you are thinking about selling and buying, or if you are a first-time buyer, it is important to talk to your local solicitor estate agent. They are the experts and have a firm grip on the local property market. They will give you the best possible advice on the state of the market and what is currently happening in the area where you are thinking of buying or selling.