Wednesday, 16 June 2010

The time is right

Apparently the time is now right for first time buyers to tear up their tenancy agreements and start to climb the slippery rungs of the housing ladder.

Santander has said that it is now cheaper to buy than rent in every area apart from London. But does that necessarily mean that it's the right time to buy?

No, it actually means that for the next month at least it may cost you marginally less, but once you've subtracted the removals costs, legal bills and the £3,565 that Santander has also told us that people in the South East spend on average kitting out their new London nest, you're unlikely to feel better off. In fact let's hope you really love your new home because it's doubtful you'll be going out much for the next year or so.

So when is the right time to buy? It's obvious really: it's the day the bell rings to indicate the bottom of the market and Santander and co offer a fixed rate at 0.5% for term. Oh, and they throw in free curtains and carpets.

Of course that didn't stop me buying my first home, a top floor flat in a London Victorian terrace, with a crack dealer next door, a prostitute below and an axe-proof front door - all mod cons in fact, and the only thing i could stretch to. Oh, and no curtains because I couldn't afford them.

And did I regret it? Yes, almost immediately, but by then it was too late and it took me six months to sell, at a loss, to someone with more stamina for the late night shinanegans of South London's crackerati.

It was a lesson worth learning - don't buy because the market says you should. You can bet your axe-proof front door that the economists telling you to buy won't be living on your street.