Since the start of the COVID-19 pandemic, the housing market has changed dramatically. Back in March 2020, the impact of a national lockdown got everybody talking about how this would affect the property market. Despite indications that the housing market could crash, it has defied all expectations. A sellers’ market was born and with the help of government incentives, the property market boomed.
The stamp duty holiday
The stamp duty holiday was a huge factor that contributed to the rise in house prices. Once the government introduced the stamp duty holiday, the demand for houses soared. More people decided it was time to up-sticks and relocate as they found they could save a large amount of money.
The imbalance in supply and demand meant that more people were looking to buy than sell. So, the prices of houses began to increase to meet the demand. Therefore, in some cases, people began to get outpriced very quickly.
Where are we now?
With house prices at an all-time high with no plans to slow down any time soon, buyers have been outpriced when bidding for their dream home. According to Halifax, the average house price reached a high of £272,992 in November, an increase of 8.2% over the year.
However, it’s not just sellers that are reaping the rewards of the housing boom. Landlords are seeing the results of the housing boom, as it has now become just as expensive to rent as it is to buy. Therefore, resulting in increased demand for rental properties too. So, if you’d love to buy a house, but you’re waiting to save a larger deposit, renting could be a great short-term fix.
Why is it a good time to buy a house?
There’s no denying that buying a house now is more expensive than it once was. So, if you’re looking to purchase a property, you must bear that in mind.
However, banks are now offering the best interest rates since the housing crash. Lenders are proposing mortgage deals for rates as low as 1-5%. So, if you can afford to buy your dream home, your monthly payments won’t hit you so hard.
Taking advantage of the low mortgage deals is perfect for those that can afford it. What’s more, first-time buyers have found the lower mortgage rates more accessible, as they’re monthly bills are significantly reduced. However, unless they have saved a large deposit, this option might also be inaccessible.
So, if you have a large deposit and want to save money on your monthly mortgage costs, now could be the perfect time to buy a house. What’s more, with monthly rental and mortgage payments equalising, there is more than one way to find your dream home.
It’s always good to research your options beforehand and speak to a mortgage advisor, especially if you are a first time buyer. The housing market can be a daunting experience so it’s helpful to have someone who is experienced to talk to.