“There is no single right answer or one-size-fits-all approach. Everything depends on the individual potential home buyer’s circumstances and goals. We work very closely with clients to understand their needs and to help them navigate their way through the many options available so that they get the solution that best matches their requirements,” Fleming comments.
He points out that people considering homeownership for the first time have a whole raft of questions that require answers. Perhaps chief amongst these will be the most basic ones. These include questions such as: is now a good time to buy? Would I be better off renting? What if property values drop after I’ve bought? What deposit am I going to need and what options do I have? Is shared ownership right for me?
Confronting these and similar questions unaided can be very daunting and can cause even enthusiast potential home-buyers to hesitate.
This is precisely why people can benefit hugely from visiting an experienced mortgage broker. As Fleming explains, if you look at the rent versus buy decision, at bedrock the simple fact is that renting does not acquire an asset and never will, while home ownership both holds out the likelihood of building up equity and, in our culture, offers both security and status.
It is undeniable that home ownership is widely regarded in the UK as a desirable thing and a source of pride. People here want to own their own homes. It’s a cultural thing.
In some countries around the world and particularly in some Continental and Asian countries, this is not the case. Renting is seen as a perfectly reasonable alternative. However, Fleming points out that in countries where this is the case, there is usually a good supply of social housing and properties available to rent.
In the UK, on the other hand, our long-term chronic underperformance when it comes to house building creates some real hazards for those in rented accommodation. Finding suitable rented accommodation can be difficult. They can be evicted if the owner decides to sell and they are subject to uncertainties over future rent rises, to name but a few issues.
So, is now a good time to consider buying? Fleming’s answer is that for most people, yes, now is a very good time to buy.
“People worry about high interest rates. In June 2023, for example, rates spiked to 7% after the Bank of England raised rates to a 15-year high of 5%. But one needs to remember that before this, rates were abnormally low for years following the 2008 global financial crash,” he notes.
Fleming points out that the rates we are now seeing are relatively normal and look like they are going to ease still further. Moreover, the housing market is currently moving well and is busy. “Almost half the people who are active in the home buying market today are first-time buyers,” he notes.
Moreover, the mortgage market is not just for first-time buyers. With rates coming down from their June 2023 high, a number of home buyers who opted for two-year fixed rate mortgages and had got locked into 6% or 7% mortgages will want to consider moving to a lower rate mortgage at their first opportunity.
“A lot of people worried about the possibility of rates going ever higher after Liz Truss’s mini-budget spooked the markets. Many of those two-year fixed rate mortgage deals could now be advantageously changed for lower rates,” Fleming comments.
He explains that it is worth starting to look for a better mortgage option at least six months before your current fixed-rate deal comes to an end. “If you can secure a better deal in the months before your current arrangement comes to an end it is always wise to do so,” he suggests.
Putting together the now more or less mandatory five percent deposit continues to be one of the biggest stumbling blocks for many who would want to buy their own homes.
“The days of zero-deposit mortgages, where people could ‘self-certify’ their ability to meet the monthly mortgage payments are long gone. However, there are a number of options out there that people need to be aware of. There are schemes with 1% deposits, and Scotland offers the possibility of a no-deposit mortgage for people stuck in rental property.
“The point is, we can help even those who currently do not have sufficient for a deposit. We can show them what they need to do to get on track and to get themselves ready for home ownership,” he says.
Scotland has a shared-ownership option available to those who are buying new-build properties from housing associations. “This is where you are part owning and part renting, and is a popular scheme. The point is, whatever your circumstances, if you are considering home ownership it is always going to be worth your while to get in touch with us. Our initial consultation is free and there is much we can do to help,” he concludes.