Is Now the Right Time to Move?

Unless you’ve been blissfully holidaying in a remote part of the world recently, you can’t have missed the headlines dominating the news in the last week or so. “Recession!”, scream the tabloids. “Market turmoil”, “housing market crash looms”!

With last week’s interest rate hike and then the (ahem) “mini budget” with proposed changes to income tax and stamp duty, the subsequent market shock and the u-turn on ditching the 45p higher rate of tax, all this can leave you feeling, well, at the least a little confused but at the most, totally bamboozled.

So one question I have been asked a lot this week is, “is now a good time to move”? As someone who works in real estate, you may think I’m going to say that any time is right for a move, but my answer to this question may surprise you.

It’s all about affordability.

People worry about the price of their home, but the reality is, it doesn’t really affect you unless you are planning to move or remortgage. In both scenarios, the answer to the question always lies in affordability.

Can you afford those monthly repayments? Could you afford it if they went up by 1%, 2%, 5%? These are the questions that every good mortgage provider will ask you when you apply for your mortgage, and it pays to give it some thought.

For every 1% that the base interest rate rises, that’s another £50 a month to pay on every £100,000 of debt. So if you have an outstanding mortgage of £300,000, that’s £150 a month extra to find, for each 1% raise in interest rates.

Remember this only comes into play if you have a variable rate mortgage, you are planning to take out a new mortgage, or if you need to remortgage your own home shortly. Which leads me to my next point…

Lock it in

In my opinion, now’s the time to opt for a fixed rate mortgage if you don’t already have one. Interest rates are forecast to increase over the coming months and by choosing a fixed rate, you’ll be getting that certainty that you know what your monthly payments are.

If you’re hoping to move in the near future, it would be worth speaking to your mortgage advisor to see if you can lock in a rate now. Most lenders will guarantee a rate for 6 months, and most will extend this period for you if you can’t complete your transaction within this time frame, as long as you’re making progress with your move.

The Bank of England meets 8 times a year to review rates. The next rate review is due on 3 November, so if you are planning a move soon, meet with your mortgage advisor a couple of weeks before that, to give you time to process an application.

Move for the long-term

People need to move for all sorts of reasons – a new job, a growing family, or to release equity from their home to enjoy for retirement. The key to stress-free moving during a time of any uncertainty is to make sure you’re focused on the end goal.

If you need more space for your growing family for example, yes you could extend your current home and deal with all the mess and upheaval that brings. Or you could choose to move to a property that already has the space you need. In either case, you’ll want to make sure you don’t have to repeat the process in 2 years’ time!

Moving for the long-term means that if there are any shocks to house prices (note, I haven’t seen any yet), then you’re unaffected by this because you’ve moved into a home that can grow with you, and you’ve locked in your mortgage at an affordable price for the next 5-10 years.

So is now the right time to move?

In summary, there is never a ‘wrong’ or a ‘right’ time to move – only a wrong or right time for you individually. People will always have the need to move home, and will choose to do so in the time frame that suits their personal situation.

If you have any questions about your own personal situation or would like a recommendation for a mortgage broker local to the Horsham area, feel free to reach out to me.