The decision to buy a home is never simple, especially in a time of uncertainty. Recent market shifts and changing financial conditions have combined to create an environment that could be either favourable or risky, depending on your circumstances.
But by exploring the key aspects that influence the property market, you can make a more informed choice that suits your individual needs.
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Mortgage rates
In recent years, mortgage rates have fluctuated considerably and this has had a profound impact on the property market. When rates are low, homebuyers benefit from lower monthly repayments, making it more affordable to borrow large sums for their dream homes. However, rising rates can cause monthly payments to soar, pushing many potential buyers to reconsider their purchase or settle for less expensive properties.
If you are in a position to act now, locking in a fixed-rate mortgage could be a smart move before further rate hikes. For example, if the Bank of England continues to raise rates to combat inflation, securing a mortgage at today’s rates could save you thousands over the life of the loan.
But, if rates remain high or increase further, waiting may lead to an even steeper cost down the line. It’s worth speaking to a financial advisor to assess how different rates would affect your ability to buy and whether it’s worth waiting for more favourable terms.
Stamp duty changes
Changes to stamp duty, the tax that buyers pay when purchasing property, have been significant over the past few years. This is a key factor to consider when deciding if now is the right time for you.
The higher the cost of the property, the greater the stamp duty you’ll pay. But depending on where you’re buying and the price of the property, there may still be opportunities to save, especially if you’re a first-time buyer.
Regional market variations
In some regions, house prices continue to rise despite national trends, while others are experiencing slower growth or even declines. For instance, big cities often see greater fluctuations in property prices compared to more rural areas. Factors like local economic conditions, employment opportunities and demand for housing can all affect how the market behaves in different regions.
It’s important to do your research into regional market conditions to understand whether now is a good time to buy in your desired location.
Government housing initiatives
There are Government initiatives aimed at those looking to buy a new home can significantly influence the timing of your purchase. In recent years, the government has introduced several schemes designed to support homebuyers, particularly those struggling with large deposits.
For example, the First Homes scheme has made it easier for first time buyers, while shared ownership schemes allow buyers to purchase a portion of a property while paying rent on the remaining share.
