Buying your first home is likely to be one of the biggest financial commitments you’ll be making in your life so far. So, how will you know when is the right time to take the leap? Here’s what you need to know about the housing market now.
Will house prices come down?
House prices have increased over the past year, largely due to limited supply. Most experts expect that house prices will continue to rise over the next year, albeit at a slower pace. Despite this, data suggests that first-time buyers (FTBs) are prepared to spend £3,400 more on a property than they were last year1. For those buying outside of London, a 3-bed house is the most popular choice for a first home.
The cost of borrowing
Mortgage rates are predicted to fall incrementally in 2024 and beyond, in line with reductions to Bank Rate. Average rates have already come down in the last year, having reduced to 4.5% in September 2024 from 5.7% in 2023 (based on a five-year fixed rate mortgage with 75% LTV). However, it is important to note that, in the long run, experts expect that ‘the new normal’ mortgage rate will be between 3.5% and 4.5%2.
The recent improvement in mortgage affordability means that monthly repayments for a typical FTB have also gone down - from £1,076 to £9791. But, with FTBs opting for more expensive homes, they still require a higher income than a year ago to achieve their property dreams.
What are you currently paying?
The right time for you to buy a property will depend on your current circumstances. If you are renting, you may decide that you don’t want to delay purchasing a home, as the average rent for new lets went up by 5.4% in the year to July 2024. On the other hand, if you are currently paying little or no rent, you may wish to keep saving to maximise the deposit you could put down.
Know what you’re looking for
There’s never going to be a perfect time to buy – instead, it’s about timing it right based on your needs. It’s advisable to know what you want from your first home – number of bedrooms, garden space, location, proximity to amenities, space for children or a pet etc. Plus, you should work with a qualified financial adviser to understand how much you can afford to spend, based on your income and any savings you may have. This will help you ascertain what is realistically achievable. You will then be better placed to make an informed decision if a property comes up that could be a good fit.
We’re here to help
We know that it can be overwhelming knowing where to start when considering buying your first home. That’s why we are here to help – we will guide you through the process, offering you unbiased advice so you can decide if it is the right time to buy your first home.
Let us offer you our guiding hand to help you get your dream home. Whether you’re in a bustling city or a quiet village, we’re never far away!
Our amazing team of advisers are based all across the UK, bringing expert mortgage advice right to your doorstep – wherever you are!
We have…
- Mortgage Brokers in Derby
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Don’t see your city? No need to worry our advisers can arrange an appointment at your preferred location or even via teams.
Your home may be repossessed if you do not keep up repayments on your mortgage.
1 Zoopla, 2024
2 Lloyds, 2024
