Buying a house?
Most of us like to take our time before deciding to part with money. Especially if you’re buying a house for hundreds of thousands of pounds.
But for home buyers in parts of the capital right now, there’s no such luxury. For them, it’s the era of the panic buy.
Why? It’s a brutal case of supply and demand. An increasing number of young-ish, middle-class buyers, armed with large deposits from the bank of mum and dad, are fighting over a relatively small number of properties. And the result is mayhem.
In Hackney, for example, an east London borough that used to be seen as down-at-heel, but now attracts aspiring homeowners in their droves, potential buyers are being herded together for open viewings, usually on a Saturday.
First, the poor (or not-so-poor) viewers almost trip over each other as they gaze into broom cupboards, tap on partition walls and measure out the modest living areas in strides. Then, the estate agents really crank up the pressure.
It’s made very clear to each buyer that, unless they come up with their best offer straight away, they risk losing out to any one of their fellow viewers. Suddenly, everyone gets hyper-anxious and starts offering more than they originally intended. And that pushes up prices.
All of which means that, if you want to buy your house in Hackney right now, you’re facing a whopping average cost of £500,000.
What’s more, it’s not just in Hackney where this phenomenon is happening – it’s being repeated across the capital. In fact, Ernst & Young report that prices in London have risen more than 11.6% in the last year. So does that mean that Britain is experiencing another dreaded ‘house price bubble’?
Prices in Scotland and Northern Ireland are barely moving, and the national average is a far more modest 5.4%. So it’s just in the big smoke where things are spiralling out of control. Indeed, one estate agent has just reported that a third of properties in the most well-heeled parts of London are being sold within a fortnight of coming onto the market. Now that’s scarily fast.
Of course, not everyone in the capital is in a state of panic. Some buyers at the very top end of the market – we’re talking Russian oligarchs and Saudi royals here – are so laid-back that they fork out silly money for a property and never even live in it.
In one road known as ‘Billionaires’ Row’, for example, there are sprawling piles worth a total of £350 million that have lain empty for years, even decades. Some are practically derelict, with greenery poking through the ballroom floors and rats scampering around the dried-up swimming pools. How galling is that if you’re fighting over a 2-bed flat in Hackney with 50 other buyers?!
How to avoid panic buying
- Avoid the dreaded open viewing. Book an appointment just for you at a time when there’s no one else around to pressurise you.
- Stretch your boundaries when it comes to location. Don’t automatically go for the locale that’s ‘in’. Try the lesser-known one next door.
- Stick to your budget! If you’re patient, you’ll always find something you like within your price range. Getting yourself into too much debt just isn’t worth it.
- If all else fails, there are some incredible mansions down Billionaire’s Row that would be great for squatting!