Buying a home: Is now the best time to buy?

25th May, 2022

Moveable property tips moving house advice property prices time to buy first time buyer home house
Photo Credit: Canva


With property prices at their highest, it may be tempting to wait to buy a home later on in the year when the property market has cooled off.

However, Simon Bath, CEO of iPlace Global – the creators of Moveable – recently spoke to the Daily Express about why now may not be a bad time to buy. Read on to find out why.


Why should you buy a property now?

The fall in demand is set to slow down the rapid growth of current house prices; however, while prices are set to drop, mortgage costs are also rising at a pace fast enough to supersede this.

The most recent rate adjustment to 1% will push monthly repayments up to £928, while a rise to 2% could see average costs up to £983 – meaning that buyers would pay an extra £1,272 a year compared to buying a property in March 2022. Even if the price of the property went down by 5%, first-time buyers are set to pay significantly more.

In fact, the average first-time buyer is already paying £612 more a year on mortgage costs than at the beginning of March!


Property prices have peaked

The property market is intimidating enough for first-time buyers to get on the ladder. Yet now, house prices have also reached an all-time high – making the process even less attractive.

However, the recent inflation projections of the Bank of England could see an interest rate rise so large this year that first-time buyers will still pay more for a property through mortgage repayments, even if prices fall in the future.

That means that waiting longer for a dip in the market may not be the best option.


Rental prices are increasing rapidly

For many homebuyers, the recent increase in the base rate to 1% from the Bank of England could be a more attractive option and relatively cheap level of borrowing – according to Central Bank’s projections – compared to the ever-increasing average rental prices seen in the market.


First-time buyers are impacted the most

The Central Bank has warned that inflation could reach double digits by the end of the year. This means that the younger generation, particularly first-time homebuyers, will be most affected by rising rates.

And this is because first-time buyers often have a smaller deposit and need the most borrowing – which will undoubtingly mean that borrowers will be scrutinised over their ability to afford a mortgage when applying to lenders.

Ultimately, first-time buyers need to know how to shop for the best deals to avoid paying over the odds as mortgage rates continue to rise.

Even if house prices start to decline, first-time buyers are set to pay significantly more if the Bank of England increases interest rates later on in the year to try and combat inflation once again.


Is buying now the best option?

Ultimately, rising mortgage costs are set to outweigh the projected decline in house prices.

Therefore, waiting for the property market to cool off – particularly as a first-time buyer that needs a significant amount of borrowing – may not be beneficial.

For those looking to avoid paying over the odds on a mortgage later on in the year as a result of rising inflation, now may be the best time to buy.


Ready to step onto the property ladder?

Moveable is a free and easy-to-use platform that helps you with the complicated process of moving and buying a home. From working out how much you can spend, to finding the best mortgage deal available for you, Moveable is your go-to home moving assistant – and it’s free to use!

It’s an absolute must for first-time buyers, so sign up for free and Moveable will give you all the help you need to make sure your move goes smoothly and stays within your budget!


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