What the Current Market Means for First Time Buyers

As autumn approaches, the housing market continues to ride the wave. Buyer demand per property is more than double what it was before the pandemic (Rightmove). Rightmove reports a 14% rise in new listings at the beginning of September*, yet the quantity of available houses for sale remains low, and competition for properties remains fierce. In August, 37 per cent of homes sold for more than their initial asking price, with an estimated 19 bidders per available property on the market (Propertymark). First-time buyers, cash purchasers, and those who have previously sold subject to contract are in the best position to gain from current market circumstances.

What does this mean for First Time Buyers?

Many individuals believe this is a perfect moment to buy a house since demand has skyrocketed during the epidemic, leading property prices to surge.

Homebuyers are looking for greater room, gardens, and a higher quality of life while also taking advantage of the government’s stamp duty break. Is today a good time to buy if you want to buy?

There is no denying that purchasing a home is an expensive endeavour.

This is partly due to the high demand for homes due to the stamp duty holiday, which ends at the end of September. House prices in the United Kingdom have likely wiped out most people’s savings.

Mortgage rates are also extremely low and may rise later this year, making it: 

  • More expensive to borrow money.
  • It is more difficult to find a low-cost mortgage deal.
  • In this section, we explain which lenders are offering mortgage deals with interest rates under 1%.

So, if you can afford to buy, now is a good time to do so. However, many first-time buyers are unable to save enough for a deposit.

Will UK house prices fall in 2022?

Several factors could cause house prices to fall:

  • The furlough scheme will be phased out on September 30, 2021, as more people lose their jobs and cannot pay their mortgages. People selling their homes increase the housing supply, which may cause prices to fall.
  • The stamp duty holiday comes to an end on the same day as fewer people rush to buy. According to HMRC data, the number of property transactions fell by 63 per cent in July compared to June.
  • If interest rates rise from their current record lows, mortgage rates will increase as well. This could cause a slowdown in demand.

However, in general, house prices have risen faster than wages over the years, causing the housing market to expand.

Should I buy a house now or wait until 2022?

Some people are hoping that once the furlough and the stamp duty holiday are over, house prices will fall, and they will be able to get a good deal. However, there is no guarantee that this will happen.

While many housing experts predict a slight drop in 2022, no one can predict the future.

If you can afford to buy a home now and plan to live in it for a number of years, you should do so rather than wait for something that may or may not happen.

If you are thinking of moving house and aren’t sure where to start looking, give our team at Qube Residential a shout for any queries.

Source: Dataloft, Propertymark, Rightmove, *First two weeks September v final two weeks of August 2021