Buying a home is no easy feat, especially in today’s market. From difficulties in getting approved for a mortgage and finding an appropriate property to chain delays to gazumping, there are a lot of obstacles in the way of aspiring homeowners.
But, of all the obstacles, which is the most common among buyers? More importantly, how can buyers potentially overcome this obstacle and achieve their dream of homeownership? Read on to find out.
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What’s the biggest challenge right now for buyers?
According to new research from estate agent Savills, the most significant constraint for buyers right now is a lack of available housing stock.
Nine out of ten buyers (90%) say a lack of housing inventory is impeding their ability to purchase a home, with nearly two thirds (65%) saying that it’s having a significant effect.
The negative effect is being felt more acutely at the top end of the market. According to Savills, 94% of buyers with a budget of £1 million or more are reporting “a lack of choice” in their search for a property.
Could the situation improve in the future?
The good news for buyers who are having difficulty finding a home right now is that more properties are expected to enter the market this year.
We are already seeing this in action, with the number of people requesting home valuations from estate agents up 11% in January compared to the same time the previous year, according to property website Rightmove.
Basically, as the year unfolds, buyers can expect to have a greater choice of properties to choose from.
Having said that, experts believe that high demand is unlikely to abate anytime soon. According to Savills, the “race for space” in particular will continue to be a key component of the market in the future.
This means that, even if there might be a larger selection of properties available, buyers will still likely have to compete fiercely for them.
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How can you put yourself in the best position as a buyer?
If you are thinking of moving this year, there are ways to increase your chances of landing the property you want.
One of the best ways, according to Rightmove, is to become a ‘power buyer’. This basically involves being in the strongest possible position to buy, either because you:
- Already have a buyer for your current home
- are chain-free
- do not need to sell first to buy
Power buyers are more appealing to sellers as are more likely to proceed with a sale quickly.
To become a power buyer, Rightmove recommends that you:
- Agree the sale of your current home before you buy.
- Get a mortgage in principle if you are a first-time buyer.
- Let your agent know ahead of time if you are cash buyer.
Meanwhile, if you aren’t yet ready to buy, perhaps because you are still trying to build a deposit for your home, see whether there are tools that can help you get there faster.
If you are a first-time buyer, opening a Lifetime ISA could provide a 25% boost to your savings.
A Lifetime ISA is a tax-free savings account from the government. People aged between 18 and 39 can open one and use it to save for a first home or retirement. You can contribute a maximum of £4,000 to a Lifetime ISA each year. The government will then top up your contributions by 25%, up to a maximum of £1,000 per year.
To learn more, including how to open one, check out our comprehensive guide to Lifetime ISAs.
