First-time buyers: is now the time to buy?
Written on 18 January 2016
Things are looking up for first-time buyers, according to new figures out today from property website, Rightmove.com.
Firstly, there’s more choice than this time last year. The Rightmove House Price Index shows a 6.6% year-on-year increase in properties for sale with up to two bedrooms, the biggest rise since 2007. That’s good news because it puts buyers in a stronger position to negotiate on price than before.
And secondly, first-time buyer asking prices have remained almost static in January. They’re up just £209 (0.1%) on the previous month, taking the average asking price to £177,261. That compares to national average asking prices for the whole market which leapt 0.5% to £290,963 in the same period.
Stable prices due to stamp duty rise
Stable first-time buyer prices are probably down to the forthcoming hike in stamp duty rates, says Rightmove.
From April 2016, anyone buying a property in addition to their own home will have to pay an extra 3% on top of the current stamp duty rates. For example, the normal stamp duty rate for a £150,000 property is 2% but this will rise to 5% for anyone buying an additional property.
“Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or fewer,” says Miles Shipside, Rightmove director and housing market analyst.
He advises potential first-time buyers to take a good look at what’s available now so they can take advantage of the greater choice and low interest rates. However, he adds that first-time buyers face a dilemma over whether to buy now or wait to see if prices drop over the next few months.
Help if you’re looking to buy
Whether you’re a first-time buyer or looking to move, take a look at our range of guides on mortgages and homes. You’ll find a host of useful information there including guides on how to get a mortgage, how to organise your finances and how to calculate how much your mortgage will cost.
You can also find out about the Government’s new scheme to help first-time buyers save up a deposit in our guide to Help to Buy ISAs.