Newsletter spring 2016
How many times do you anticipate buying and selling a property in the course of your life? It’s not a question many of us ask ourselves, but the cost of moving is phenomenal, anything from 3% to 10% of the value of the property, and that can mean 20% of your equity with a 50% mortgage.
When you consider that the average person moves seven times in their life, the costs start to look eye-watering. If you have any respect for your equity, think outside your immediate lifestyle, and try to anticipate what your requirements will be as your life progresses.
At Stacks, we have identified (with apologies for generalisation and stereo-typing) seven ages of house buyer.
1. Young independents looking for heart of city / town apartments
2. Young marrieds, looking for a quieter, more suburban, lifestyle
3. Young families, with babies’ or toddlers’ education at a local school taking priority when it comes to location choice
4. Families with young teens whose biggest desire is a paddock for ponies, or a field and party barn for teen parties
5. Families with older children who are reluctant to leave home but have an overwhelming requirement to have easy access to a large town or city
6. Empty-nesters who have a desire for the peace of the countryside but a yearning for a bit more town life
7. Retired downsizers who covet an easy to keep, lock-up-and-leave pad in a cultural city.
An appreciation that, give or take, this list will almost certainly have some retrospective resonance, may help you reduce the number of times you buy and sell.
– Try and hang on to your first home. Unless you are very lucky, the chances are this property will be in a non-prime area; but if you manage to hold onto it and rent it out, you will almost certainly find that the location becomes a great deal more attractive, possibly to the extent that it meets your needs at the other end of your property-buying life. Or failing that, will have shown a very useful capital growth.
– Try to combine stage 3 and stage 4. It’s difficult to believe that your gorgeous babies will ever grow into adolescents, but their primary school years will quickly pass, and you will encounter a whole new set of property priorities.
– Avoid Stage 5 altogether. Once your children are no longer children, their property requirements shouldn’t influence your choices. If they don’t like your house, or its location, then it’s a good moment for them to find their own nest!
– Stage 6 and 7 can potentially be combined by swapping one property for two smaller ones, for instance, a coast or country cottage, and an urban pad. Size at this stage of life has become less important, and there are many advantages to two properties. As stage 6 kicks in, one property can be rented out or sold to provide extra income.
So while life rarely sticks to the rules you’ve laid down for it, some degree of planning and understanding of the future will help you reduce your number of moves, allowing you to spend more on property and less on stamp duty, estate agents, solicitors and moving fees.
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When making probably the most important financial decision of your life, it pays to have the right advisors at your side.
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“We firmly believe that without Rachel and her skilled negotiation we would not have secured the property.”
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“Encouraging me to think creatively about what could work for me.”
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