Buying a new house is never an easy process. From saving for the deposit to finding the perfect property, from hiring a good estate agent to finding the right mortgage, there is so much involved!
If you are thinking of buying your first house, you should get in touch with Peter Ball Cheltenham letting agents to make the process just a little bit easier. Speaking of which, if you’ve been wondering whether now is a good time to buy your first house or if you should wait until 2022, here are some factors that you might want to keep in mind while making your decision.
Rising house prices:
The average price of property in the UK has been rising tremendously in the last few months. According to Nationwide, UK house prices have risen at the fastest pace since November 2004. All of the UK saw a rise in the average price of property in the second half of 2021, especially Northern Ireland and Wales.
In Northern Ireland, the average price of property rose by a whopping 14 per cent from the last year, whereas in Wales, the average price of property rose by 13.1 per cent in the year. Surprisingly, London was actually the lowest-performing region where the average property price rose by 7.3 per cent from last year. However, it is important to note that the price of property has risen all throughout the country.
Of course, no expert can predict with any amount of certainty whether the prices will continue to increase in the future or start falling by the end of 2021. So, first-time buyers need to make a well-informed and well-researched decision if they are thinking about buying a house in 2021.
Stamp duty holiday:
The UK government announced the stamp duty holiday, which was essentially a temporary suspension of the stamp duty. Thanks to the stamp duty holiday, buyers either had to pay no stamp duty or a reduced amount of stamp duty on their property purchases, which helped them save thousands and thousands of pounds.
Initially, the stamp duty holiday was introduced in July 2020 and was expected to end in March 2021. However, due to its overwhelming success, the government decided to further extend the stamp duty holiday until September 2021. If first-time buyers are looking to save some money on their property purchase, then they should make the most of the stamp duty holiday, which is set to end in 2021!
Covid-19 and its impact:
Due to the Covid-19 pandemic, there was a lot of uncertainty in the housing market. While many buyers and sellers were apprehensive about entering the market, some were ready to take the plunge. Also, the Covid-19 pandemic led to a change in the buyer’s preferences. Initially, people wanted to stay in places that were close to their place of work, somewhere in the city centre.
However, as more and more people started working from home and spent their days at home, the demand for bigger homes with outdoor spaces and private gardens increased. People no longer wanted to be cooped up indoors. So, many first-time buyers and homeowners started looking at properties in the outskirts and the boroughs, where they could live in bigger and better properties.
While the demand for such properties has increased in recent times, whether or not this trend will continue is not certain. So, first-time buyers need to be very smart about the location of their property. They need to decide whether they want to buy a spacious place in the outskirts or a smaller place in the city centre, keeping in mind the uncertainty around the Covid-19, the dynamic housing market as well as their employment status.
Low deposit mortgage guarantee:
In order to boost the UK housing market as well as the economy, the UK government announced a low deposit mortgage scheme. Under this scheme, first-time buyers and investors could get a mortgage by paying just 5 per cent of the property’s total value as a deposit.
Due to the uncertainty around Covid-19, banks and lenders became very strict about their lending criteria. Due to this, first-time buyers were unable to enter the housing market. So, the UK government decided to introduce the low deposit mortgage guarantee in order to allow first-time buyers and low-income individuals to climb up the property ladder.
Since this scheme is only a temporary measure, it is set to end in December 2022. But, with the changing schemes and changing markets, it might be a good idea for first-time buyers to make the most of the low deposit mortgage guarantee scheme before the interest rates start to rise.
At the end of the day, every potential buyer needs to make a well-thought-out decision based on thorough research, a fair understanding of the market and their housing requirements. No expert can predict the right time; it all depends on the time that is right for you.
Read Also: 4 Tips to Keep in Mind When Buying a Home