One of the main places that we turn to for advice when buying our first home is often friends and family, who can be a great help and offer lots of useful advice. Or even a deposit, if you ask really, really nicely.
However, the problem is that many parents would've likely bought their property around 20-plus years ago. So, their advice and knowledge may be based on what it was like to buy at that time. But, since then, the property market has changed considerably, as has the process of buying and selling a home.
Because of this difference, older family members may not understand the process you'll be going through today, which can lead to conflicting opinions.
Here are five key changes to the property market today compared to sometime ago that can help you illustrate how the market has changed.
It’s also worth you knowing about these changes as they could make a big difference to your decision making when buying a home.
Property prices rarely rise at the rate they used to
Between 2000 and 2005, property prices essentially doubled across the whole of the UK. That got people used to believing that if you buy, your property will always go up considerably in value.
Since 2005, even with post-pandemic rises, property prices have risen around 3% a year on average. The exceptions, as ever, being London and the South East. In other words, in line with inflation, which means they've grown a lot less than before.
For example, in the North East, the average price of a property in 2007 was just under £140,000. By 2021, the average price was just 4% higher than this - £145,000. In other words, property prices aren’t guaranteed to rise at the rate they did since your parents bought their home.
However, one thing you have that wasn’t available to your parents is much more data to helps us understand what’s happening, price-wise.
Our data shows that although upsizers and downsizers saw large price rises over the last 12 months, First Time Buyers are not paying that much more than they were last year. Part of the reason for this is that many First Time Buyers buy a flat, but most of the inflation over the last 12 months has been on houses.
Renting can give you the flexibility you currently need
Back in the 1990s, it wasn’t easy to get a decent property if you were renting. There were fewer laws to protect tenants, unlike the many rules and regulations that exist today. The likelihood of you being able to rent an executive home, a new build, or a city centre apartment in good condition was virtually nil.
With the current costs of buying, especially raising funds for a deposit, it may take you longer to save for a property than your parents. Therefore, renting a nice home can be a good option if you need flexible living for a few years - until your life settles down and your finances allow you to purchase.
Although rarely needed in the 90s, government support - think Help to Buy, Shared Ownership and the new First Homes scheme - are much needed now. Especially for expensive areas, such as London.
While they've had their critics, with many claiming they're 'overpriced', these programs have also helped many people to get on the property ladder, without paying the full price for the property. If you can, have a chat with someone who's benefited from these incentives for both sides of the story. Good narratives don't always make headlines - especially in the property market.
Making checks on a property before you offer and buy
With many properties built pre-WW2, it’s essential to make checks on your chosen property. Look for lease length, possible service charges, and ground rent. It's also important to note any major works required (for example, paying for a new roof). Also check for cladding issues, which may make the property unmortgageable.
Older flats were often built with a lease length of 125 years, so few people worried that the lease would fall below the 80 years, which can make it difficult to secure a mortgage. Any flat built pre-1980s may not have the lease length required to purchase and sell later on.
It's also critical to get a surveyor to check a property, no matter its age. Qualified building surveyors train for over 5 years and must abide by a strict code of conduct - so you can trust their findings and know they aren’t ‘in cahoots’ with the agent selling the property.
The length of time it takes to buy
Finally, buying a home is rarely a quick process today. There are a large number of checks to be made. For example, identity and fraud checks need to be made by lenders, brokers, and legal companies. Sellers have to provide a lot more information and paperwork than they did in the past, and if they don’t, you'll need to get advice from experts about paying for things like gas and electric checks.
As a result, buying a property can take months, not than weeks as it once did. So, keep on top of your purchase at each stage to make sure there are no nasty surprises that could cause you to or the seller to pull out at a moment's notice.
It’s always worth taking as much advice and help as you can when buying, but the most important people to listen to are your mortgage broker, your conveyancer, and surveyor. They're the ones who understand the modern property market how best to navigate it as a First Time Buyer.