Posted:19th July, 2022

Is it the right time to buy a house?

We took a deep dive into the current state of the property market to bring you more than just the gloomy headlines we often see. We looked at some of the leading accounts on what’s happening with house prices in the UK and brought together some answers to the most frequently asked questions.

This isn’t financial advice and shouldn’t be taken as such, but it is a place for you to find out what’s happening in the housing market, what the future might look like and some good news for first time buyers too!

Yes, prices have risen.

It’s no secret, house prices in the UK have indeed risen significantly over the last 2 years, “Many experts argue that there is a house price bubble. Affordability is a big problem with the average property costing 9.1 times the average salary. In 1997 properties cost just 3.5 times average earnings.” - The Times Money Mentor

So, the rising costs are clear and present and the biggest questions about these rising prices are:

  • Why have house prices risen so much?
  • Are they going to fall again?
  • What help is available to me?

There are, of course, a multitude of reasons for the rise in house prices. The general consensus is that the pandemic is a huge contributing factor. The huge resurgence happened in June 2020, as lockdown was lifted, demand rocketed. While demand to buy shot up, the supply was not initially matched. Along with this, attempts to encourage purchasing power such as the Stamp Duty Land Tax holiday gave prospective buyers the potential to save £15,000 in tax when buying a house. Another factor that pushed demand up, but as points out:

“This acted as a stimulus, ironically driving the house prices up by an average of £15,409… in effect wiping out the stamp duty saving.”

There is help at hand

It’s not all bad news! Despite the rising prices there is some support available for you, particularly if you’re a first-time buyer.

Following the pandemic, the increased demand to buy meant that mortgage lenders asked for bigger deposits, sometimes as high as 15%. Many people were unable to save for such a high deposit, so the government stepped in. The 95% Mortgage Guarantee Scheme reduced the risk for lenders and gave more opportunity to buyers, given that a deposit as low as 5% is much more affordable.

Another relief for buyers was the SDLT holiday. Although it stopped in October 2021 for most, it stays in place for first-time buyers on properties £300,000 and below, as long as you intend to live there. This means, with a deposit that is potentially as low as 5% combined with significant tax relief, a new home can be very attainable, despite rising house prices.

The balancing act…

Given the rising prices, you might assume that it’s not the time to buy. Thankfully, it’s not that simple. Yes, prices and demand are still high and there’s no concrete indication when they will drop.

However, do your research and it might pay off.

The current availability of competitive mortgages could make borrowing cheaper for you, and it might not always be this way,

“With the Bank of England opting to increase the base rate several times…and a growing likelihood that it will action further rises in 2022, borrowing could become more expensive” -

There’s hope too that the supply will catch up to the demand. According to there’s been,

“A staggering shortage of available properties. This became a principal reason for asking prices rocketing up. But the number of listings is finally starting to rise.”

So, is it the right time to buy?

Like we said, we’re not financial advisers. It’s important that you do your research and carefully consider your personal and financial circumstances as well as what’s happening in the market when you’re deciding when to buy.

If after careful consideration you are in the position to buy, we’ve got some fantastic new build developments for you to view today. Get in touch with us today, and see for yourself.