With the recent news that house prices are falling at their fastest rate since the last property market collapse in 1992 the situation appears bleak for those homeowners who’s fixed rate mortgages are up for renewal, and for those who have no other option than to sell. However a leading UK home purchase company, Quickmovenow.com, warns home-owners not to panic over the findings, as there are still viable options available to them.
The media is full of stories of sellers facing falling prices, of fixed rate mortgage renewals at ever higher costs and of buy-to-let investors selling up and getting out. However, fewer than five per cent of homeowners will be looking to move this year, fixed rate mortgages renewals due account for less than 3 per cent of mortgages out there and the buy-to–let bubble may have an impact on city centre flats but will hardly scratch the surface of the normal housing market.
Similarly the majority of home owners have made no use of their increased wealth ‘on paper’ as house values increased over the past decade, the fact that they might now fall back five or ten per cent this year is of little consequence. The ‘feel good’ factor may be lacking but the economic reality of their daily life will be unaffected.
The impact for the small minority of home owners who need to move and/or remortgage will, however, be significant. But if the need to move is a necessity there are options available which make for a better financial decision in these difficult markets.
Hywel Luke of Quickmovenow.com, a web based company who are market leaders in buying properties to enable clients to move on quickly, says: “Firstly you must be realistic in what you ask for your home. Price is absolutely critical in this market. Look at what other, similar properties are on the market for and consider undercutting them. Remember those other properties on the market have yet to sell at that price, so you have no hope unless you can show any potential buyers that there is a real bargain to gain for purchasing your home.
“Secondly, do not panic, there are other methods for selling apart from using the traditional Estate Agent. You could try auction, but anticipate that auctioneers will be looking for a reserve price at least 20 per cent below the realistic current market price. If, on the day, the room has a few committed investors you could do better than this but resign yourself to the fact that some recent auctions have sold fewer than half their lots so the reserve price may be as much as you can hope for.
“Alternatively, there are a number of house buying companies such as Quickmovenow.com who will buy quickly. Typically they will offer 80-85 per cent of that realistic current value and will complete in two to four weeks. Some may even offer to rent your home back to you. But this is not a facility that Quickmovenow.com provides, preferring to resell its properties in the open market. Be careful of these rent-back schemes because the investors need to make a profit over their mortgage costs so, by definition, this makes it hard to set a rent which is less than your old mortgage payments. We have heard of many cases where people have been evicted after just six months as rents have been hiked to generate investor’s profit.”
