I’m thinking of moving to a bigger place. What’s your advice? Should I go for it?
THE current market provides an opportune moment to upsize, especially if you’re not planning another in the next 7-10 years. There are some great buying opportunities, so if you can, get moving. The extra good news is that you will be generally financially better off upsizing in a softer market.
For example, if prices have fallen 10 per cent and you own a property worth £500,000, you will need to accept a 10 per cent reduction on your sale price — which equates to £50,000. However, if you’re looking at buying a property worth £800,000 and you can negotiate a 10 per cent discount on the asking price — which is £80,000 — you are net £30,000 better off.
Of course there are transaction costs to take into account — so the numbers aren’t quite as simple as that — but the numbers do make sense.
Therefore, if you’re thinking of upsizing and you can afford to do so, I would say jump at the chance of doing so while the market is soft as it will be much more cost effective to do it now than wait for prices to recover.
That said, you do need to make sure you are negotiating a genuine discount on the property you are buying. Fewer transactions cause less transparency in the market because you have fewer comparable sales to reference as an indication of what you should be paying.
Sometimes you can negotiate a discount on an asking price, but if the asking price was inflated in the first place, then your perceived discount is not really a discount at all — instead, you have simply paid a fair price.
Remember, estate agents work for the seller, so there is only so much you can rely on them for pricing data.
If you want complete transparency with prices, it is well worth investing in independent advice — it will usually more than pay for itself through the savings they will negotiate for you.
If you are unable to do this, compare prices in the area, looking especially at price per square foot.