Is now the right time to get on the property ladder?


Is now the right time to get on the property ladder?

In 2014, the number of first-time buyers climbing on to the property ladder reached its highest peak in seven years, according to reports. The number of buyers rose by 22% to 326,500, suggesting that the new buyers’ market is going from strength to strength. Numbers of first-time buyers have been increasing every year since 2011, when there were fewer than 200,000.

Joining property market

According to the stats, the average house price for a first-time buyer is £171,870, up 9% year-on-year, although many commentators are predicting that house prices may plateau this year. The average age of first-time buyers has risen slightly to 30. This could show that people are staying in rented accommodation, or living with parents for longer whilst they save for a bigger deposit for a mortgage.

The Bank of England is now expected to keep base interest rates at their historic low for some time to come, with some sources predicting no rise before 2016. However, other analysts think that interest rates could be put up towards the end of 2015, meaning that if you’re thinking about buying a house, now may be a good time to do so before any potential rates rises.  So, if you’re yet to climb on to the property ladder, now could be the right time to look at buying your first home.

Competitive deals

Some first-time buyers may be considering longer term fixed mortgages – whist they may have slightly higher rates than tracker rate deals currently on offer they do give certainty that the monthly payments will not change.  Some mortgage lenders are offering record low rates right now, so if you’re a buyer wanting to take out a fixed-rate mortgage for two, five or even a 10 year period, now could be the time to look for the best deal for you.

If you want to get the cheapest deals, you’ll usually have to be able to pay a sizeable deposit. The best medium and long-term mortgage deals are for people who can afford to pay a deposit of 40% or 60% of their house price, meaning that some first-time buyers won’t be able to make the most of these offers. However, if you’re a potential first-time buyer looking for a deal but can only afford a smaller deposit, you can still benefit from the competitive mortgage deals available.  

Apply for a Mortgage

Already on the ladder

If you already have a mortgage, you might still be able to benefit from the competitive mortgage deals currently available if you remortgage. Bear in mind you may have to pay exit fees from your current mortgage deal, so it’s worth looking to see what you’re currently paying and what’s available before you consider moving to another provider.