What do rising house prices mean for 1st-time buyers?
In the past year, everything seems to be going up, from energy and food bills to house and rental prices. We are all tightening our belts and finding different ways to minimise our outgoings.
For buyers looking to buy their first property or families and couples seeking to move home, you may assume this would be a bad time to enter the property market. However, there are several reasons why buying property now is a great choice.
Why are house prices increasing?
Figures just released by Zoopla show that house prices rose by 8.3% between March 2021 and March 2022, representing an average house price of £249,700 in the UK.
During the pandemic, there was an unexpected demand for homes as people adjusted to new pressures and situations, and many of these trends seem to be continuing.
One cause is people no longer need to live close to their work, due to new remote and hybrid working trends. Commuters now want to get away from cramped, urban living to somewhere with more space.
At the same time, people who are going back to the workplace may want to save money in the current challenging circumstances by cutting down their commute.
Two trends which have driven the current market increase are:
- The Stamp Duty holiday from June 2021
- The high price of rental property
These forces have combined to create a substantial demand for homes, leading to a shortage of properties on the market, and pushing prices up over the past two years.
The ‘Reallymoving’ House Price Forecast, which tracks agreed house prices at the start of the conveyancing process, predicted another sharp increase from March-to-May 2022 for final purchase.
However, experts are predicting that the property market will begin to cool off and stabilise after the sharp rise in house prices in the first half 2022. Although, this is not likely to mean any decrease in price, property market inflation should begin to plateau.
Why is now a good time for 1st-time buyers?
While there is no denying that properties are expensive and house price inflation is set to continue in the short-term. Now is still a great time for 1st time buyers to get onto the property ladder.
For one, rental prices are set to increase in line with the housing market. Meaning that waiting and continuing to rent is not going to be the cheaper option it might once have been.
In recent years, mortgage rates have also been extremely low, due to the Bank of England base interest rate being at one stage as low as 0.1%. This has now climbed to 1% and is likely to increase further, but even these rates are extremely low in historical terms.
Mortgage rates will inevitably rise in respond to these increases, but it is still possible find extremely low fixed-rate deals. These will enable 1st-time buyers to keep their repayment costs low as both interest rates and living costs rise.
How can 1st-time buyers navigate the market to secure an affordable home?
Even home buyers with multiple purchases under their belts can find it difficult to navigate the property market successfully, and this is far truer for 1st-time buyers.
Purchasing a property is one of the biggest assets you will ever buy. Therefore, ensure you have the best and most trusted legal advice by consulting an expert conveyancing solicitor. A good independent mortgage advisor can help you find the best deal, but the most important person to consult is a conveyancing expert.
Speaking to a solicitor before you begin your search will help you avoid many of the pitfalls and identify the most efficient ways of handling the process, avoiding unnecessary delays and extra costs.
If you are considering taking advantage of the chance to make a successful first purchase, the time to speak to a conveyancing solicitor is now. Choose a specialist with a proven track record of providing expert conveyancing advice.
To ensure you experience a property transaction that is as smooth and stress-free as possible, get in touch with our expert Conveyancing Team for a free conveyancing quote. Follow the link or call us on 01525 378177.
