First Time Buyers: Is now a good time to buy?

With the pandemic largely behind us, the housing market is booming. According to research from Halifax, the average house price in the UK hit a record of £282,753 in March 2022. Monthly house price growth of 1.4% is the biggest increase for six months. Additionally, the new record price of £282,753 is up almost £30K from a year ago. An out weighted demand versus supply is fueling this rise. So, is now the right time to buy your first home? In this blog, we’ll cover key considerations to help you make the decision.

First Time Buyers: is this a good time to buy a house?

Given strong momentum in the housing market, record housing prices present yet another obstacle to first time home buyers. Combined with rising interest rates, inflation, and cost of living pressures, it can be harder to save up for a deposit. For first-time buyers, the First Homes scheme might offer some relief. If you’re a first-time buyer, you may be able to buy a home for 30%-50% less than its market price. Your potential new home can be a new home built by a developer or a home you buy from someone else who originally purchased it as part of the scheme. The First Homes Scheme is only available in England and you must be able to get a mortgage for at least half the price of the home. Contact JP Goldman for more information on how to purchase your first home.


How much can you afford in the current mortgage market?

To get the best mortgage for your home in this housing market, lenders will often ask for up to 10% deposit. If you’re struggling to save up, you could apply for a mortgage with a minimum 5% deposit using the mortgage guarantee scheme (which is open to new 95% mortgage until 31 December 2022). If you’re wondering how much you can borrow, use a mortgage calculator to determine your monthly payments. With rising interest rates, a mortgage calculator can also illustrate how an interest rate change could affect your payments.

What additional costs should first-time buyers prepare for?

In addition to a mortgage, first-time home buyers are responsible for stamp duty land tax, property searches, mortgage arrangement fees, conveyancing services, and home insurance. Importantly, stamp duty is the tax you’ll pay on property and land transactions. In most cases, SDLT can be the largest additional cost associated with buying a new home. However, first-time buyers are eligible for relief on purchases of residential property for £300,000 or less (this threshold is higher in some localities). Please contact us to discuss your eligibility and options as a first-time home buyer.


Contact JP Goldman to Discuss your First-Home Purchase

With record housing prices, it’s important for first-time buyers to consider all available options prior to making a purchasing decision. Several government schemes can provide relief. But it’s also important to budget for additional costs. To help you make the best first-time home buyer decision, contact JPGoldman to discuss your options.