Have you been pipped at the post for your dream house by another buyer? Are you constantly offering on properties only to have your offer turned down in favour of a better one or a buyer who is in a stronger position?
Read on to find out how you can put yourself ahead of other house buyers in the UK.
How Competitive is the UK Housing Market for Buyers?
The UK housing market has boomed in the past few years. Since the first COVID lockdown ended in May 2020, property professionals have struggled to keep up with buyer demand. In March 2021, property sales on Rightmove hit an all-time high as more than 9m people logged on to search for a new home, and almost 8,000 properties were sold in one day.
Many buyers have been left frustrated and disenchanted by the housing market since the pandemic began. With so many people vying for the most popular homes, how can you put yourself ahead of other house buyers in the UK?
Not all houses sell fast, and many property experts are predicting that the market will begin to cool this year, in part due to the end of the stamp duty holiday. But if you find yourself in a highly competitive market as a house buyer, there are several ways to boost the chances of a seller accepting your offer over others (even if yours is not the highest offer).
How to Beat Competition from Other House Buyers
You might think that the only way to beat competition from other house buyers is to up your offer. While your offer amount will play a key part in determining whether or not the seller accepts, it’s probably not the only factor affecting their decision. You can increase your chances of success by:
Decide What You Really Want
If you’re not quite sure exactly what kind of property you want to buy, it could mean that you lose time viewing unsuitable properties and miss out on the perfect home for you.
Write a list of must-have property features, locations and amenities and rank these in order of importance. Create a second list of dream features that would be the icing on the cake. Armed with your research, search online for properties that fit the bill. If there are a lot of choices and you know that competition is fierce, request viewings in priority order. Book in the most promising properties before requesting to view those that check off fewer points on your list of must-haves.
Save a Healthy Deposit
Once you have a clear idea of what you want and how much it is likely to cost, assess your finances. How much can you realistically put down as a deposit? Is it enough to secure the mortgage you need?
In a competitive market, it might be worth saving a bigger deposit to give yourself a little wiggle room when it comes to negotiations. If you have more money than necessary to buy the kind of home you want, there’s scope to bump up your offer. You’ll also be in a better position to secure the mortgage you need.
Selling Your Current Home
A chain-free buyer is a holy grail for sellers. Avoiding the dreaded property chain (at least in one direction) means less risk of delays and a failed sale. If you need to sell your current home before buying a new one, get a sale agreed upon before you make an offer on another property.
In a sellers’ market, some homeowners will not even allow people to view their property unless they have at least put their home on the market. And if the seller receives multiple offers, everything else being equal, they are much more likely to accept an offer from a chain-free buyer.
But, where will I live if I sell my house before I buy another one? Selling up and renting while you house hunt is a shrewd move in a hot property market. You might not like the idea of throwing money away on rent, but if it means you’re in prime position to snap up the house of your dreams as soon as it hits the market, isn’t it worth it? Also, property chain problems can cause a lot of stress and expense. As a renter, you may only have an onward chain to contend with (if the person you buy from is in a chain).
If you’re ready to offer on a property and need to sell your house fast, contact us for a free, no-obligation cash offer today.
If You’re a Cash Buyer, Shout It from the Rooftops!
If you have enough cash in the bank to buy a property without taking out a mortgage, let your estate agent know! The only buyer who is in a stronger position than a chain-free buyer is a cash buyer.
Sellers love cash buyers because not only are they chain-free, they also do not need to apply for a mortgage, and the sales process is typically much faster. Some properties are advertised as “cash buyers only”. This often happens because the property is unmortgageable, or the owner needs to sell the house fast. This is probably the only scenario where being a cash buyer will not give you an edge over the competition (as all parties will be cash buyers).
Get a Mortgage in Principle
If you’re a first-time buyer and need a mortgage to buy a property, get a mortgage in principle before you offer. Some sellers will only accept “qualified” offers, that is, ones from buyers who can show proof that they are in a financial position to buy their home. For first-time buyers, an agreement in principle (AIP) is the best way to demonstrate that you are serious about the purchase (nobody likes a time waster) and that you can secure the funds to go through with the transaction.
An AIP, sometimes called a Decision in Principle (DIP), is a statement from a lender that they are willing to approve a mortgage for a specified amount of money. While such an agreement is not a guarantee that you will get a mortgage for that amount, it demonstrates that you have taken the time to go through the process and that the lender deems you — in principle — to be a good candidate for the loan you require. This reassures the seller that you are in a position to buy their property. If they accept your offer, you will have to make a formal mortgage application.
It’s worth noting that some lenders run “soft” credit checks when you apply for an AIP, and others run “hard” checks. The latter can affect your credit score if you rack up a lot of them.
There is no way to guarantee that a seller will accept your offer, especially if there is a lot of competition. But, by getting your finances in order, deciding what you want in a new home and making yourself a chain-free buyer by selling your house and renting, you will strengthen your position by making yourself a more attractive prospect to sellers.