Price dip prompts panic purchase

09-01-2008

Price dip prompts panic purchase
As many as one in ten UK homebuyers have accelerated plans to purchase property as prices begin to moderate.

That is according to research from financial advice sight Fool.co.uk, which finds 11 per cent of buyers have brought forward their plans to purchase a property.

A further 38 per cent of those looking to buy a home now plan to do some within a year, whereas 34 per cent plan to purchase in 2009.

"The long-overdue correction in the property market will allow many people who have been waiting to move house to finally realise their dream," said David Kuo, head of personal finance at Fool.co.uk.

The results form part of a survey assessing market attitudes until 2012, and also highlights there will be more sellers than buyers for the next five years.

According to Fool.co.uk, for every four buyers looking to secure a house, their will be five wishing to sell.

This year could be the year prices see a radical correction after years of growth.

While Fool.co.uk shows prices increased by an average of between eight and nine per cent between 1952 and 2000, this has now radically accelerated.

Since 2000 prices have increased by some 13 per cent a year.

As a result affordability has fallen to an all time low, with many first-time buyers driven from the market.

However, those looking to buy property should consider their options carefully before taking the plunge.

"Quite often people will ask how much they can borrow when they want to buy a property. But that is altogether the wrong question. Instead, they should ask themselves how much they can afford to repay," argued Mr Kuo.

"Instead it is more important to get the correct mortgage and to ensure that you can afford to maintain payments if interest rates rise. Only then can you be sure that your home-owning dream does not turn into a wealth-destroying nightmare," he added.

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