January is typically a quiet month in the property market. Indeed, figures from HM Revenue and Customs show that there were fewer property transactions completed in January 2019 than in any other month of the year.
Despite the cold weather and the lack of transactions, January could actually be a great time to start looking for your new home.
This is certainly the case for many buyers, with a leading mortgage broker revealing that they had a huge spike in the number of mortgage applications submitted on Christmas Day 2019! Keep reading to find out more.
January a great time to bag a property bargain
Official HMRC data shows that there were around 20% fewer property transactions completed in January 2019 than in the height of the summer.
However, many experts believe that the start of the year is actually a great time to grab a property bargain. This is partly because people who are selling their home in the middle of the festive holiday season are often selling because they have to. Buyers can therefore take advantage of this situation and get a better deal on a property than they would later in the year.
According to a study by the London School of Economics, the UK property market sees increases in both prices and in the number of transactions during the ‘hot season’ of the spring and summer.
The same study found the opposite happens when the weather is cold. House prices and transactions tend to fall from October to March. Towards the end of March, demand is trending upwards so prices will pick up, too.
Beware of the weather if your home needs work
One factor to consider if you’re thinking of buying a property during the winter is the difficulty in carrying out any refurbishment or significant work during the cold and wet weather.
External work can be very difficult to complete in bad weather, while even internal work could be hard to manage. For example, if your new home needs a boiler replacement, you may struggle to find a central heating engineer that can come at short notice during the cold months.
Buying a property that needs work could be a particular issue if you’re a landlord thinking of investing in a buy-to-let, as there may be a considerable void period while you ensure the property you buy is in good condition to let out during the winter.
You should balance this against the fact that you may have more bargaining power in January, meaning it can be easier to find something below the asking price, which of course in the long-term can increase your rental yields and capital gains.
Buy when it is right for you
As the London School of Economics study shows, there are clear seasonal trends to house prices. However, the right time to buy always depends on you and your objectives.
Every season can have its pros and cons. You have to find the right time in terms of your personal circumstances and when you’re ready to make your move.
If you’re predominantly driven by asking price, then it might be that late autumn and winter are the best options for you but, as we have seen, you should be wary of the possible challenges if the property will need work doing before you can move in.
Huge increase in Christmas mortgage applications shows buyers are ready to move
While many of us were relaxing and enjoying the festive break last month, a leading mortgage broker has revealed that eager house buyers spent their Christmas Day applying for a brand-new mortgage.
Demonstrating that buyers were preparing to make their move in early 2020, research from digital broker, Mojo Mortgages, showed that there was a 433% spike in the number of people applying for a mortgage through their site on Christmas Day.
Compared to year-on-year figures, applications peaked on 25 December 2019, with more first-time buyers looking to apply for a mortgage in 2020.
Richard Hayes, CEO and co-founder at Mojo Mortgages, said: “December is a notoriously quiet period for applying for a mortgage, but our daily stats have shown that more people than ever are looking to get sort out their mortgage for 2020 and find out what they are eligible for, especially first-time buyers who are looking to get on the property ladder.
“There are many reasons for this, one of which could be due to the result of the election earlier on in the month that has boosted confidence within the market.
“It’s well known that from 26 to 31 December property searches are also higher, because many people are off work and the have spare time to look for a new house, so people who are applying for a mortgage seem to be doing their due diligence ahead of their new home searches,” he added.