According to the Nationwide Building Society, the UK housing market has made a "strong start" in 2006, with the biggest rise in house prices for 18 months, rising by 1.4% in January. This was seen by the Nationwide as part of a "strengthening trend” since October, with confidence returning to the housing market, but the high price rises of 2004 were not expected to return. Jeremy Leaf of the Royal Institution of Chartered Surveyors said, 'The housing market is definitely seeing signs of a recovery,' and he predicted that, 'modest price rises are expected to continue into the year.' Fionnuala Earley, an economist for the Nationwide, stated that she believed that factors such as pension fears, declining consumer appetite for debt and below-average economic growth would help to restrain further house price rises in 2006. Another sign that people are regaining confidence in the market can be seen alongside a warning from the BBC that many first-time buyers are willing to overpay in order to get onto the first rung of the property ladder. The Yorkshire Bank has announced that more than one in five first-time buyers are currently willing to offer above the asking price, compared with a year ago when less than one in ten were willing to pay over the asking price. Gary Lumby, a Yorkshire Bank spokesman, said, "Buyers are starting 2006 in a more positive mood than last year, when there seemed to be a lot more uncertainty regarding where the housing market was going." Whilst more first-time-buyers purchasing property is extremely beneficial as it allows for greater movement within the market place, the increase in the number of buyers willing to overpay could be a cause for concern. With the UK personal debt level currently running at £1,158bn, and buyers risking the possibility of future negative equity on the mortgage, some caution should be exercised by those thinking of overpaying. It is vitally important when making any kind of investment that you get the right advice and ensure you will be able to afford the payments. With something as important as financing your own home, you should get as much information and qualified advice as possible. Many financial web sites such as Moneynet and Motley Fool provide free straight forward guides on mortgages and house buying to help navigate the many possible pitfalls which buyers can fall foul of. A good starting place for buying a house is to check-out the prices of houses in and around the area you are thinking of moving to, in order to see if the house is over/under priced. A site like myhouseprice.com which checks data from the Governments Land Registry can help with this type of information. Buyers should also form an impression of what the local community

is like. Websites such as upmystreet.com and homecheck.co.uk can be useful sources of basic information such as the average property prices for the area, crime rates, schools, flooding and pollution information, as well as the general demographics of the neighborhood. Another important next step is to determine how much it is possible to borrow, the amount that will be needed (including all lenders rates, surveys, deposits, solicitors fees, movement costs, insurance, etc.), and double checking how much can actually be afforded for the mortgage payments. This stage can be extremely nerve wracking, but it is absolutely vital to help avoid serious future financial difficulties. The potential house buyer can then start to determine type of mortgage that would be the best one for them to be taken out for the final potential purchase. The decision on which mortgage to obtain will make the difference of many thousands of pounds and so it is essential that this decision is made with the best help available. The rates of lenders can be easily compared through financial comparison sites like Moneynet or Moneyfacts, and help on what to look for can be found on the Governments Financial Services Authority website. It is to be recommended that before any buyer takes out a mortgage or any other financially binding contract, that they seek qualified independent advice. This is because while it is not actually required, if advice is not taken, there would be fewer grounds for making a possible complaint and seeking financial recompense should the mortgage product turn out to be unsuitable at a later date. With the appropriate finances agreed and secured, then the house buyer can start the actual process of approaching the house sellers with a view to having surveys completed and possibly making an offer with all the complications that involves. Useful resources: Moneynet mortgage guide ( http://www.moneynet.co.uk/mortgage-guide/index.shtml ) Motley Fool mortgage guide ( http://www.fool.co.uk/mortgages/articles/introduction.htm ) Disclaimer: All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986. You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

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