The gap grows. An Avocado market insight.
In the home counties over 65% of all sellers move home to upsize and live in a bigger property. The other 35% of moves are relocation, sale of asset or of course, a downsize.
As we all know, the property market is bonkers! Prices are climbing, and regardless of the inflation increase there is no sign of the market slowing down. The great news for home owners is that every month the value of your home increases. The down side is that if you do want to upsize at some point, the gap between your home and the next is increasing month by month too.
So to quote the underground service spokesperson 'please mind the gap'.
Halifax reported last month that prices in the UK have risen 10.8% year on year. (See example below)
3 Bed End of Terrace Property £385,000 (in 2021)
3 Bed End of Terrace Property £426,580 (today)
A massive £41,580 increase! Does more equity mean a new loan to value mortgage rate? If your deposit size is larger, then maybe your interest rate will be lower and the cost of mortgage interest much less.
If you are not planning to move, then staying where you are and re-mortgaging after your fixed term ends is a good idea, especially if you are planning to do an extension or any other property upgrades. Be aware you can also ask for a new valuation on the new fixed term to push your overall house price up and the loan to value down.
If this is something your keen on doing or chatting about, we can help with advice or recommend a broker for you anytime. Just pop some info in the 'contact us' form below:
You might however use the new equity to get a new house... Typically house prices increase, so the sooner you upsize the better for the total mortgage amount you will pay off over your lifetime. (See example below).
4 bedroom house worth £625,000 (2021)
The same house would now be worth £692,500 (today)
Maybe climbing to around £800,000 in 2025?
House prices go up in the UK over 10 year chunks, they always have and always will. There is a shortage of property and the demand is always there to buy.
Psst Don’t forget mortgage deals are at an incredible low at the moment, so even if the price on that dream home is higher than you wanted; the monthly amount is much, much lower than it would have been 24 months ago. You may have heard the avocado partners say it before; “Today is the cheapest day to buy a property”.
Thanks for reading and if you have an questions, feel free to contact us anytime.
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