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Home buyers blow moving budgets by £14,000

New research reveals that a third (31 per cent) of home buyers surveyed have rushed into buying a property to take advantage of the tax break, rising to 56 per cent of owners aged 25-34 and to 49 per cent aged 16-24. The research from Tymit – the UK’s first instalment-only credit card – showed that despite these savings, homeowners are facing an unexpected welcome home gift: debt.

Two-thirds of home owners surveyed have forgotten to budget for purchases such as furniture and decorators – with the average overspending by £14,861 – despite having more time to plan their big move. With many Brits rushing up the property ladder this year, Tymit predicts they’ll blow their moving budgets even further.

There’s no place like debt

The average budget for kitting out a new home was £22,387, but when analysing respondents’ actual spending, the research reveals that Brits surpass their original target by 67 per cent – at £37,248 total – which sends them into the red. Londoners are crowned the worst planners as they overshoot their budget by £27k, and one in five go over by £50k. Those residing in the capital are followed by movers in the West Midlands (£18k) and the South East (£17.8k).

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With the average house price in England costing £268k, homeowners would be saving £3.4k thanks to the tax break. But these savings are bittersweet, with bad budgeting surpassing stamp duty savings by a massive 337 per cent.

Better budgeting

As a result of this bad planning, Brits spend almost three years paying off these additional expenses across a mix of loans and credit cards. A staggering 60 per cent of homeowners surveyed say they would do things differently if they had the chance, with a fifth saying they would budget better and the same amount doing more thorough research into furnishing and decorating costs. Of those surveyed, 11 months is the optimum amount of time to prepare.

The top five purchases likely to blow home-buyers’ budgets are:

  1. Building Service Charges – 59 per cent
  2. Plumbing Bills – 57 per cent
  3. Kitting out the Bathroom – 51 per cent
  4. Kitting out the Garden – 51 per cent
  5. Decorators – 51 per cent

The top five lifestyle purchases associated with home moving, likely to blow home owners budgets are:

  1. Increased Energy Bills – 62 per cent
  2. Second Car – 53 per cent
  3. Countryside Attire – 44 per cent
  4. Buying a pet – 42 per cent
  5. New toys – 42 per cent

Martin Magnone, CEO and co-founder of Tymit said: “Home is where the heart is, but rushing to make one saving on your home move can cost you more in the long run. Brits should be planning their expenses longer term as it is not just essential for budgeting the big move, but for the whole new lifestyle it brings too. For when the unexpected does arrive, there are ways to fund them without saddling yourself in revolving debt. Responsible lines of credit available – such as Tymit – have no hidden fees and are completely transparent on interest rates, helping you effectively budget your way back to zero, and enjoy your new home in the process.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

To help the UK’s home buyers budget better, Tymit has partnered with Clare Seal – founder of The Financial Wellbeing Forum and the Instagrammer behind My Frugal Year –  to share her top tips for the home buying process:

  1. Stress test your budgets: The last year has shown us that your financial situation can turn on a dime. With this in mind, create a budget that factors all of your regular incomings and outgoings, then stress test how factors outside of your control – such as a reduction in salary – would dent your overall finances. This will help you to set a safety net should the worst happen, enabling you to determine a realistic mortgage range and calculate leftover income for ongoing expense that won’t put you out of pocket.
  2. The little things add up: When you’re spending hundreds of thousands of pounds on a property, a hundred here and there on the little things seem inconsequential in comparison. But they’re not – the little things all mount up. Whether it’s new cutlery, crockery or finishing touches, record everything in your budget to keep your spend on track.
  3. Don’t forget about lifestyle: They say home is where the heart is, but it’s important that you think about your lifestyle outside of the home too. Factor in these costs to your budget – and try to think about how it might change in your new area. Will transport costs increase? Will your gym membership change? Planning for these changes will ensure you can make the most of the new area, so your home doesn’t feel like your prison!
  4. Trust the numbers, and nothing else: Buying a house is exciting, but when buying a house with a partner, relative or friend, it can quickly lead to disagreements on which items warrant more budget. If you’re in heated negotiations about which sofa, carpet or TV to purchase, always refer to your budget and let the numbers – not the heart – have the final say.
  5. Use credit wisely: With the best will in the world, in can still be easy to blow your budget from time to time. If you do find yourself using loans, credit cards or Buy Now Pay Later services, make sure you do so responsibly. Having a credit card can be no bad thing as long as you have a plan to manage it, and don’t over-commit yourself – brands such as Tymit come with no hidden fees or interest rates, and have handy interest calculators that help you to create a repayment plan that works best for you and your home.

BY PETE CARVILL

Source: Property Wire

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Buyers are making offers on homes before viewing

A growing number of property buyers are making offers on homes before viewing them in order to gain a competitive edge in what has been described as a ‘mad’ housing market.

BBC Wales Live reports that many estate agents in the Wales are selling properties within hours of listing them, sometimes with dozens of offers on the table. This is a trend also identified in some other UK hotspots.

The surge in demand for property has left some buyers looking for new ways to gain an advantage over other purchasers.

Last month demand for some properties in Aberdare saw people queueing overnight outside an estate agents.

Mel John, an estate agent in Caerphilly, said that there has been a sharp rise in practices like gazumping in recent weeks.

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“I’ve walked away from a number of properties where the sellers would have encouraged gazumping, as an estate agent I wouldn’t want to be any part of that,” she told the BBC. “I don’t think it’s ethical really for anybody to go down that route.”

Purchases across the UK are paying over the asking price for properties, as the current supply-demand imbalance results in competitive bidding wars.

More than a third of property sales were subject to multiple offers during the first quarter of 2021, according to research by Hamptons.

Some 36% of homes sold by the company in Q1 2021 received offers from at least three buyers.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Separate data released by Propertymark this week revealed that one in three properties sold for more than the asking price in April.

The 32% of properties sold for more than the original asking price in April is twice as many properties than in March when 16% of homes sold for over the initial asking price.

Mark Hayward, chief policy advisor, Propertymark, said: “It is phenomenal to see demand for housing breaking records, as house buyers continue to fuel the post Covid economy. However, the continued imbalance of supply and demand is a concern and has led to a strong sellers’ market with properties being snapped up quickly at high prices.”

By MARC DA SILVA

Source: Property Industry Eye

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