There is no denying that the both the residential and commercial property markets are as weak as a McDonalds coffee. Prices continue to slump and there seems to be no let up on the horizon. So, is this perhaps the best time to start investing?
New research from the Building Societies Association (BSA) shows that public opinion about buying property in 2011 is positive. According to the findings, nearly 66% of us would buy straight away or within the next year, given adequate amounts of money.
But while low interest rates and competitive property prices, may be tempting you to throw a line back into the market, is this really the right time to buy?
Well, a lot depends on your motivation for buying. If you plan to acquire at some stage in the next 12 months, you could find yourself buying in a declining market. That said, only some property experts are predicting prices will fall sharply.
Nationwide’s chief economist Martin Gahbauer said there was some evidence to suggest, declining house prices will gather speed in the months ahead. And Martin Ellis, Halifax’s housing economist, expects house prices to stay ‘broadly stable’ during 2011.
The Royal Institution of Chartered Surveyors (RICS) also says prices are likely to carry on slipping over the pending months, but that the deficiency of supply in the market is liable to avert considerable price declines.
With this in mind, it may well make sense for those looking to take the first steps to buying property in the next 12 months, to take benefit of lower house prices.
The same applies to those looking to upsize. Even though you will get less for the property you are selling, you will make savings on the property you are buying and this is likely to be the bigger sum.
According to Halifax, interest rates are expected to remain very low for some time, and they forecast no more than one rise to the Bank of England base rate in 2011.
The Council of Mortgage Lenders (CML) also says it’s doubtful that the base rate will rise appreciably in the short term and that it may well stay unaffected at 0.5% for the whole of 2011.
But we could well say, so what? The rates have been low for some time now and it has made no change at all to the property market. I believe that, until the banks start giving away mortgages we are looking at a stagnant market. So, if you want to upgrade or move, I would say buy – but for investment – I would say, be patient.
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