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Antony Antoniou – Luxury Property Expert

Things You Need to Know About Buying a Home in 2023

Things You Need to Know About Buying a Home in 2023

The Market Outlook

The housing market is expected to see falling prices this year, with high inflation, rising mortgage rates, and affordability issues putting downward pressure on demand and values. However, while a decline is widely predicted, buyers still face challenges. Here’s what you need to know about the market outlook for 2023:

– **Prices will fall but not catastrophically** – Most forecasts are for a 5-10% drop in house prices this year. This would essentially erase some of the rapid gains seen during the pandemic, taking the market back to early 2022 levels.
– **The gap between asking and sale prices is key** – If this gap widens much beyond 5%, it signals more significant falls ahead. For now, it remains around the pre-pandemic norm of 3%.
– **Mortgage rates have spiked** – Fixed rate deals are now over 6% on average, reducing purchasing power. However, fixing still provides interest rate certainty.
– **Affordability is stretched** – With high inflation and rising rates, mortgage affordability is the worst since 2008. Buyers need sizable deposits.
– **Demand looks set to wane** – But could prove resilient longer-term once stability returns, given factors like wage growth and amassed savings.

Starting Your Search

If you’re planning to buy in 2023, here are some tips on beginning your property search:

– **Register online and in real life** – Sign up with the major portals but also directly with local estate agents to build relationships. Stay in regular contact.
– **Define your must-haves** – Compromise on what you can change but not dealbreakers like space and light. Be realistic about budgets.
– **Avoid over-filtering online** – Country or character homes often defy tickbox searches. Stay open-minded.
– **Consider off-market options** – Letter drops in target areas, social media ads, buying agents tap into hidden stock.

First-Time Buyers

For those getting on the ladder for the first time, key factors include:

– **Mortgage affordability** – With stretched affordability, sizeable deposits are more important than ever. Aim for 15-20%.
– **Explore government schemes** – Shared ownership or LISAs offer deposit support. Help to Buy has ended.
– **Check local demand** – Hot areas require early moves to secure schools. Apply by January for primary places.

Moving Up the Ladder

If you’re looking for more space, be aware:

– **Second-steppers sell too** – Juggling buying and selling is tricky. Get paperwork like EPCs lined up ASAP.
– **Stay realistic on space** – Avoid overstretching budgets and be prepared to compromise on bedrooms or outdoor space.
– **Don’t overlook hidden costs** – Factoring in all fees from surveys to stamp duty prevents nasty shocks. Budget for regular outlay.

Buying Larger or Luxury

Top tips for bigger budget house hunts:

– **View at varied times** – Get a feel for the property and surroundings at different times of day. Few are 100% perfect.
– **Involve professionals** – Buying agents provide insight on value, negotiate effectively. Especially useful in volatile markets.
– **Think long-term** – Focus on what can’t easily be changed like noise issues or access. Decor and layout are simpler to improve.

Moving with Families

If buying a family home, timing is critical:

– **Research schools availability** – Popular schools have caps on catchment area places. Moving early avoids disappointment.
– **Consider commuting** – Easy access to work, childcare and activities affects day-to-day living. Test drive routes.
– **Think outside the box** – Explore nearby villages or smaller towns if city premiums are too high.


Downsizing into retirement? Watch for:

– **Local amenities** – Prioritize easy access to shops and services over size. Manageable gardens too.
– **Storage limitations** – Carefully measure furniture and possessions to ensure they’ll fit.
– **Cost savings** – Crunch the numbers as smaller properties don’t always reduce outgoings.
– **Lifestyle over location** – Focus less on impressing others, more on practicality and enjoyment.


For prospective landlords, the market is challenging:

– **Mortgage costs have risen** – Making positive cashflow harder to achieve in lower yield areas like London.
– **Tax changes reduce returns** – With less mortgage interest relief and higher income tax bills.
– **More regulation adds hassle** – Stricter safety and management rules to navigate. Not for amateur investors.

Leaseholds and Freeholds

If you’re looking at leasehold flats, don’t overlook:

– **Check remaining lease term** – Look for 80+ years remaining. Under 70 years could make remortgaging and sales harder.
– **Be aware of escalating ground rents** – More common on newer builds. Can become extremely expensive over time so check the small print.
– **Factor in extension costs** – Extending leases of under 80 years will add substantial expense.

Second Homes and Holiday Lets

City dwellers often regret rushed purchases of rural retreats. Avoid by:

– **Trying before you buy** – Rent first to experience country living before committing fully.
– **Choosing the right rural** – Pick a property suited to your taste for solitude or amenities.
– **Investigating local rules** – Research planning and local letting regulations which can be onerous.

Making an Offer

Once you’ve found the property you want, tips for the offer stage:

– **Check recent sales** – Seek insight from agents on local prices actually achieved to inform offers.
– **Be realistic** – Have scope to negotiate down 5-10% from asking prices but expect it to be expected.
– **Avoid gazundering** – Renegotiating offers downwards later causes issues with mortgages and loans.

Transaction Costs

Budgeting for a house purchase, remember:

– **Mortgage and broker fees** – Arrangement costs often 1%+ of loan size. Valuation fees on top.
– **Surveys** – Can easily total £1,000+ each over several failed attempts. But provide peace of mind.
– **Conveyancing** – Around £500-£1,150 plus £700 disbursements. Varies by property value.
– **Stamp duty** – Significant tax liability depending on property price. Calculate accurately.

Help Along the Way

You don’t need to go it alone in the home buying process:

– **Buying agents** – Worth the 1-3% fees to access off market options, leverage local insights and negotiate effectively. Especially in challenging markets.
– **Mortgage brokers** – Advisers like SPF Private Clients help navigate products and achieve the best rates based on your personal situation.
– **Conveyancers** – Property lawyers handle all legal work and searches to ensure transactions complete smoothly and securely.
– **Removals** – Take the stress out of moving day by hiring professionals to safely transport your possessions.

The housing market faces uncertainty this year but for buyers who go in informed, undesirable surprises can be avoided. Do your research, seek advice, and don’t compromise on your property priorities.

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