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should you buy a house with inflation this high?

should you buy a house with inflation this high?

Home prices have been rising for several years now and are going up as well as the demand for houses that has an inflation-linked mortgage. Most of us are looking for house financing that is easy to avail of with a flexible repayment option. We don’t want to pay high rates just because we are buying a home.



Good property loans are available

Some good property loans should be able to offer affordable rates, especially if a person can easily qualify. It could be a great decision if you can get a loan to build your dream house without any problems after considering factors like credit score or affordability. When it comes to purchasing a new house in a recessionary economy, it is always not worth making big purchases and opting for low-priced properties. However, buying property seems to give you some advantages in terms of lower rates and higher profit margins. Let's take a look at why you need to consider this when deciding on a house to buy. 


 

what real estate markets mean

The term ‘real Estate market’ means a collective name used by different professionals in the field of finance to refer to all the activities engaged in the sale and acquisition of real properties. The process includes many legal procedures including due diligence to ensure maximum value of properties with clear timelines of completion.



Role in the market

The real Estate Market plays an important role in giving home buyers choices and they can choose from various options available regarding the price range of the home and other essential features of the project. Also, one needs to factor in the plans of a newly built property and how the buyer intends to use it for his benefit. As we know, the housing market has become extremely volatile and the prevailing economic condition of the country influences the market to move in the right direction.

Inflation is growing day by day so this is the best time for house buyers UK to buy houses because in the future house prices may be out of your range.


 

Factors

There are numerous factors which influence the growth of the real property market such as the global recession which negatively impacts both the present and prospects of the industry. Apart from fluctuating rental rates, prices will rise in the long run as investors are also affected. However, the cost of housing is also determined by government policies and laws and there is no room for correction. Many people who are looking to purchase a house in an expensive area of town are facing major challenges regarding finding affordable and well-connected property deals. If the buyer cannot find property deals that suit them without breaking even the bank then he might face difficulties for the rest of their life. Therefore, one needs to keep abreast of the current market trends and predict the future accordingly. But what does the house price mean and what kind of rate can you expect it to go up shortly?


 

How much house should I buy?

Well, the average house price is £150,000 to £200,000 plus taxes. Now a couple of months back, the average house price was almost £135,000-£140,000 but presently, it is increasing rapidly and £150,000 to £200,000 is the average price. So, when buying a house, one must make sure whether it wants to live there forever or has a high chance of resale value. And when buying a house, it should meet certain minimum requirements like a net operating income of £600,000 and also a projected 5% annual income to enjoy tax breaks. To avoid the occurrence of any financial crisis, the most ideal time for home buyers to buy a house with a high inflation-linked mortgage is in 2015. Since then, the debt-to-income ratio has increased considerably between 2006 and 2015 and in the future, we will see more than a 30% debt-to-income ratio which will lead to an increase in interest rates. According to experts, it is better to think about the house purchase in the year 2013 as it is a good time for selling as soon as possible and to start building new homes instead of buying a new place right away. For example, if one buys a house in 2010 for £150,000 then one should put it under sale in 3 years. Similarly, if you buy a 10,000 sq ft house in 2011, it's not ideal to sell it in only two years. Hence, for the same amount, you will need at least five years to sell it. If you can sell the house during the last years in an active and positive condition, the return on investment will be very attractive compared to those who sold after two years.



Another aspect

Now let's discuss another aspect of house-buying: should I buy a duplex? Yes! There is nothing wrong or negative to a duplex as it provides the space for privacy. One can choose the size of the apartment according to his convenience and budget. They come in various sizes and different designs and many other benefits over the ordinary houses. Not only does it helps in creating room for growing plants during summer but it also increases the value of the apartment in the eyes of customers. Furthermore, it is a spacious place where one can relax and unwind from stressful days of work. Along with having a large space, duplexes are famous for providing quick access to the supermarket which can be very convenient for those doing shopping in the city.


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