House purchases: Is now a good time to buy?

Date Posted:
January 13, 2023

If you have recently found yourself in a position to buy a house, you may be wondering whether now is the right time. With the housing market experiencing record sales and prices, committing to buying a house in 2022 can seem like a big decision and you would be wise to consider all the varying factors around the current economic climate such as the effect of pandemic, Brexit and the future energy price rise.

Although those factors may seem like a negative, there are several reasons you should think about purchasing a new home this year.

House Prices

Although the rising cost of houses may be a negative for some potential buyers, especially first-time buyers, if you are already a homeowner, the house price increase can actually work in your favour. If you are looking to downsize of move into a more affordable home, then selling and moving now would be beneficial.

For those looking to get into the market for the first time, or looking to buy a bigger property, then house prices are predicted to slow down during 2022, so it could be worth waiting for a few months for the housing market to settle slightly to try and get a better deal that you would be able to access now.

Mortgage Guarantee Scheme

In April of last year, the government launched the mortgage guarantee scheme to help buyers with small deposits to get onto and move up the property ladder. This initiative, launched in April 2021, was designed to encourage lenders to offer 95% loan to value (LTV) mortgages for properties worth up to £600,000 by offering a guarantee to participating lenders to cover some of the mortgage over 80%.

This means that if you only have a 5% deposit, you can still get access to a mortgage and move onto the property ladder. Several big high street lenders including NatWest, Barclays, HSBC, Lloyds, Santander, and Virgin Money have signed up to the scheme, which is running until the end of 2022, and with other banks and building societies having their own small deposit initiatives in place, now is a really good time to try and buy a home if you haven’t got the option to save a huge deposit amount.

Low Interest Rates

2021 saw a record low in mortgage interest rates, with sub 1% mortgages being offered for those with a decent sized deposit. However, in November of last year, the Bank of England increased its base rate to 0.25%. This and a predicted future increase in February has meant that lenders have begun to increase their mortgage rates. Though thanks to the already low starting point, the interest rates are still relatively low. Which is why now would be a great time to purchase a property before the cost of borrowing becomes even higher due to further rate increases.

There is no definitive answer to whether now is a suitable time to buy, it is dependent on personal circumstances, which is why speaking to a mortgage broker is a good idea when considering your options. Property Link Homes have over 30 years of experience in finding their clients their ideal home for the best possible price and can help you find deals and offers you won’t find elsewhere. *

If you are interested in how a mortgage broker can help you, and you are looking to re-mortgage, buy-to-let, looking for commercial property or are coming to the end of a fixed term deal, then please get in touch with one of our expert team today.

*As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

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