5 Reasons Why You Should Buy Your First Home NOW!
Buying your first-home is always an exciting chapter in your life, but many prospective buyers tend to procrastinate and put it off as we approach the final months of the calendar year. The idea of starting the process in the new year seems logical, but the reality is that so many people will be thinking the same and so it becomes more difficult at the turn of the year.
In this blog, we will guide you through five reasons as to why the final weeks of Autumn are a fantastic time to buy a house in 2023. With low house prices, frozen interest rates, and a wider variety of incentives, it’s the perfect time to buy a new house, and it may even be ready for christmas.
1) House Prices Are Low
One of the standout factors influencing the decision to buy a home is the value of the property, and the state of the housing market has a significant influence on that. Low house prices provide a golden opportunity for first-time buyers to enter the market and secure a home at a more affordable price. Whilst the real estate market can be unpredictable, capitalising whilst house prices are on the lower end will be a wise financial move in the long run.
In November 2022, house prices were at a recent peak when they averaged £294,910. Studies carried out by HM Land Registry for the UK House Price Index show a fall in house prices, with the average UK house costing £287,546 in June 2023, falling by £7,364.
Low house prices are particularly advantageous for first-time buyers, as they often have limited budgets and are looking for an affordable entry point into the housing market. Buying whilst prices are low, as they are currently, can help you avoid overstretching your finances and increase your chances of finding a property that meets your needs whilst sticking to your financial plan.
2) Buyer Incentives
There are a range of added incentives for first-time buyers in the UK. The government and local authorities often introduce various schemes and programmes to encourage first-time buyers. These incentives can include reduced interest rates, or discounts, which can significantly ease the financial burden of buying a home.
One of the government schemes available is the ‘First Homes Scheme’, which opens the door for First-Time Buyers to the possibility of buying a home for 30-50% less than its market value. The Government website explains:
“You can look for new homes in your area that are advertised by developers as part of the First Homes scheme.
Developers offer these homes to first-time buyers with 30% to 50% of the market value taken off the price.
Every home that’s sold is valued by an independent surveyor to make sure the discount is based on actual market value.
The homes cannot cost more than £420,000 in London, or £250,000 anywhere else in England, after the discount has been applied.
You can only sell the home to someone who is eligible to buy a First Home. You must give them the same percentage discount that you got, based on the home’s market value at the time of sale.”
You can find out more information about the First Homes scheme here: https://www.gov.uk/first-homes-scheme
There are various other incentives designed to support individuals who are entering the real estate market for the first time. They aim to make the homebuying process more affordable and accessible, helping you overcome some of the financial barriers that can often deter new buyers. These incentives can make a huge difference in your ability to adapt towards homeownership, so be sure to explore the options available in your preferred region.
3) High Supply of New Builds
Another compelling reason to buy your first home right now is the high supply of new-build properties. Many developers are actively building new homes to meet the demand, which means you have a wide range of options to choose from. With more choices available, you're more likely to find a property that fits your needs, preferences, and budget.
The availability of new builds provides several advantages for first-time buyers. First, new construction often comes with modern amenities and energy-efficient features, reducing the likelihood of expensive repairs and maintenance in the early years of homeownership. Additionally, developers may offer attractive incentives to move inventory quickly, such as covering closing costs or providing appliance upgrades, which can further sweeten the deal.
4) Interest Rates Frozen
Interest rates play a crucial role in the overall cost of your mortgage. On the 20th of September 2023, the Bank of England announced it would be holding interest rates at 5.25%, an unexpected freeze after raising them 14 times in a row since the end of 2021.
This situation is favourable for first-time homebuyers because it means that not only will interest rates stop rising for the near future, but it will also be a fixed rate, all of which allows for lower monthly mortgage payments, less interest paid over the life of the loan, and a steadier financial forecast for yourself. Without having to worry too much about interest rates continuing to rise, it now becomes easier to budget with consistent expenditures each month.
Low-interest rates can significantly impact the affordability of your home purchase. When interest rates are frozen at a low level, your monthly mortgage payments will be more manageable, allowing you to allocate more of your income toward other financial goals or lifestyle choices. It's essential to take advantage of these favorable rates while they last, as they can have a substantial impact on your long-term financial well-being.
5) Winter is Coming…
The holiday season is approaching, and for first-time homebuyers, this can be a perfect time to make a move. Closing on your new home just before Christmas can be a fantastic way to start a new chapter in your life. You can decorate your new space, invite family and friends over for holiday celebrations, and create lasting memories in your very own home.
Not only does it benefit you by settling the nerves of moving, in time for Christmas, but it could also ease competition in comparison to waiting for the turn of the year. To so many, the idea of starting the process in the new year seems the more logical decision, but the reality is that so many people will be thinking the same and so it could become more difficult after January. Searching for your house earlier could mean less competition, and an easier search process.
Conclusion
In conclusion, if you've been contemplating buying your first home, the current market conditions provide compelling reasons to take the leap. With low house prices, buyer incentives, a high supply of new builds, frozen interest rates, and the holiday season just around the corner, now might be the best time to become a homeowner.
As always, be sure to conduct thorough research, and seek guidance where needed. At New Homes Broker, we can help you find and secure your perfect home, whilst also connecting you with financial advisors and other relevant parties, allowing you to make a decision that aligns with your unique financial situation and life goals.
For more information on the service we offer, visit this blog.