Is Now the Right Time to Buy a House?
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Buying a house is the primary financial goal for a lot of people. They want to become homeowners or, if already on the property ladder, they want to upgrade to the home of their dreams or even downsize. If you’ve been planning to buy a house, recent events might be causing you to hesitate. There are fewer 90% mortgages, but some will also benefit from the stamp duty holiday that has been put in place. It could be a good time to buy for some people, but others might discover that they’re better off waiting until market conditions change. So how do you decide if you should be looking to buy?
First Time Buyer?
One thing that’s likely to make a big difference is if you’re a first time buyer. If you are, it’s likely you’ve been planning to buy a property using a 90% or even 95% mortgage. Unfortunately, many of these are currently not available. Some of those that are might only be open for applications for a day or two at a time. This makes it difficult for first time buyers, many of whom also won’t be benefitting from the stamp duty holiday because they wouldn’t have paid it anyway. If you’re a first time buyer, you might want to wait and continue saving.
However, many first time buyers have been submitting mortgage applications in the last few months. If you are able to find a larger deposit, perhaps you won’t want to put off buying until later.
Image from Pixabay – CC0 License
Get Professional Advice
If you’re thinking about buying a home soon, getting advice from people who know what they’re talking about is important. You should speak to a mortgage broker to help you find the best deal, especially one that can look at the whole mortgage market for you. They can let you know what you can expect at the moment and whether you have a chance of finding a mortgage that you’re happy with. Other professionals, like real estate agents, can help you get a much better idea of what the market is like specifically in the areas that you’re looking at, as well. Working with teams who know that area, such as MGP Property, can help you get a better idea of how recent sales have gone there, and can give you the information you need to know whether or not the area suits your needs.
Benefit from Stamp Duty Relief
One reason to move now is to benefit from the stamp duty holiday. The threshold for stamp duty has been raised to £500,000. If you’re a first time buyer, this would only affect you if you’re buying a property valued at over £300,000. Otherwise, you would not have paid stamp duty anyway. If you’re already a homeowner, you could benefit if you’re planning on buying a property for over £125,000, which was the previous threshold for existing property owners. The £500,000 threshold will stay in place for first time buyers past 1 April 2021, whereas it will return to £125,000 for other home buyers. So first time buyers planning on buying more expensive properties may wish to wait until later next year.
For first time buyers, there will be less competition and potentially a better choice of mortgages if you wait until next year to buy. However, existing homeowners could benefit from buying before April, especially if they can save money with the stamp duty holiday.
*This is a collaborative post.
