With house prices continuing to rise, first-time buyers across the UK are faced with a key question: should we buy now or wait for the market to cool down?
Figures released by the Office for National Statistics show the increase average house prices in the UK leapt to 12.4% last month – a substantial increase from 9.7%.
But Sky News put the question as to whether first-time buyers should attempt to get on the housing ladder immediately – or delay their purchase – to personal finance expert Gemma Godfrey.
Here’s her answer in full:
Image: Personal finance expert Gemma GodfreySaving enough money to buy a first home is a momentous achievement and trying to wait for a “better time to buy” could be risky for three reasons.
AdvertisementFirstly, there’s no guarantee that house prices will fall, especially in highly sought-after areas where there are more people looking to buy than sell.
Secondly, if interest rates continue to rise, a mortgage could become more expensive, especially if you were considering getting a fixed rate mortgage which could be fixed at a lower rate today.
Thirdly, during tough times, banks have made it tougher to qualify for a mortgage, so again there’s a risk that it might not be as easy to qualify for the mortgage offers on the market today.
In general, buying a home that you’re going to live in for years can be an emotional purchase.
It can take time to find one that’s right for you and once you do, the risk of losing it to another buyer might outweigh the benefit of waiting for a possible drop in price.
Gemma is a business advisor, finance expert and TV host, an ambassador for the charity Surviving Economic Abuse, and a former boardroom adviser to Arnold Schwarzenegger on The Apprentice.