My wife and I are seriously considering buying a small place in the UK (west london). I waited a looong time for this "epic crash" and now believe the establishment will only allow a slow motion crash over a decade at least (and that's optimistic). But that's not the point I want to make..... no one knows for sure which way the market will go.
Having contacted some agents and got some research done on what our cash can buy us... some things have become clear. And they're not encouraging for people looking for a home.
Firstly, it appears to be a sellers market in the extreme. But this isn't only due to many buyers looking for a place to live obviously. The main competition we've observed in the small home market are investors. Lots of them.
We are fortunate in being cash buyers. And so it seems are most investors. So the advantage of being able to move quick is not an advantage. In fact for most buyers with a mortgage, it's got to be a terrible struggle to compete.
Secondly our big lesson has been agents favour investors over first time buyers etc. But this isn't only due to investors flashing wads of liquid cash. I guess the reason is agents look at investors as good future prospects for business. An agent might get work managing the property for the landlord, or the investor might buy more properties in future. This is a dire situation for people searching for a home to live in. Investors are blatantly given preferential treatment in the market.
One of the first questions each agent has put to us is "are you an investor or home buyer?"
And here's another scenario along the same lines. We came across a pair of maisonettes on the same plot. We only wanted one to live in, but oddly the seller and agent didn't appear interested in our cash. We actually put an offer in over the asking price. And still no interest. The reason turned out to be that the freeholder selling wanted someone to buy both not just one maisonette. This would make financial matter easier i.e. one contact for charging ground rent, annual charges etc. Now obviously people looking for a home aren't wanting to buy two maisonettes. They want one. And so in this scenario once again the home buyer loses out to the investor.
All this has been a depressing education. I'm not up to speed with UK law to assist home buyers in preference to investors (is there any?). I was in the states for about 2 years, and certainly over there home buyers are given advantages over investors in a few ways (HUD homes etc). So at least in the USA it's recognised as moral to favour people who need somewhere to actually live over business and profit. And the USA is supposedly more right wing and capitalist than the UK!!
In the UK it seems no one fights the corner for people looking for basic shelter at all. Unless there is some legislation you can tell me about?
Anyway, in our case we may have an out waiting for us. We joked about how nice it would be to cut out the agents altogether, and soon after a manager of mine hooked us up with a colleague about to sell his maisonette privately. So if suitable we may not deal with the slime at all