The property market has got off to a strong start in 2018 with the number of buyers increasing but also the asking prices on properties.
Rightmove’s House Price Index has shown that there is a very high demand for properties with 141 million visits to the Rightmove website by potential buyers. Miles Shipside, director and housing market analyst for Rightmove, said: “Whilst it is the norm for new sellers’ asking prices to be buoyant at the start of the New Year, this first complete month in 2018 is seeing more pricing optimism than the comparable period in 2017.”
With the 2017 rise in interest rates and further increases forecast for later in 2018, more people are looking to fix the term of their mortgage for longer periods. Research from Accord revealed that in January, 51% of mortgage applications from first-time buyer applications were for five-year fixed-rate deals, compared to just 20% a year ago. While two-year fixed-rate deals made up just 48% of applications in January, down from 63% in the January 2017.
Steve Ellis, Head of Financial Services at WeLocate Finance said: “Traditionally people have opted for a two year fixed deal as they are usually the best rate and they give you flexibility at the end of the shorter term. However, the five-year rates have become very competitive and with talk of interest rates rising again, people want the added security and stability of a longer deal and are still able to port the majority of the five-year deals should they want to move property within that five years.”
Figures show that it is now cheaper to buy a home than to rent one, with the national average cost of a mortgage for a three bedroom home being £679 a month while the national average rent for a three bedroom home being £754. This is a £900 annual saving.