Sweet Spot for First Time Buyers

Sweet Spot for first time buyers.

When’s the right time to buy? It’s a question many first-time buyers will ask as they look forward to owning their own home. Many will refer to the adage that time in the market is better that timing the market and history usually shows us that this is correct. The long term trajectory of house prices over the last 50 plus years has only gone one way. Up.

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A few factors appear to be driving us towards a window that could present that right time for first time buyers. Labours first budget incoming at the end of this month presents unconfirmed but strongly rumoured changes to the property market.

The first factor is The Stamp duty land tax cut announced by the government on 23 September 2022 will that is scheduled to remain in place until 31 March 2025. This gives first time buyers relief of zero banding from stamp duty up to properties worth £425,000. Labour have confirmed neither way whether this will change at this point in time, but Labour have told us they are looking to fill the quoted £22billion black hole in the budget. With your typical house buying process taking 3-6 months now it the time to consider if these changes will impact you and your buying power.

The second factor is potential tax changes, in particular Capital Gains Tax (CGT), strongly rumoured in the press that Labour have evaluated the possibility of bringing CGT in line with income tax and the strength of this rumour has, in some quarters seen a rise in chain-free properties coming on to the market as some landlords look to sell properties before these potential changes would take effect.

Another potential change that some landlords are basing their decision making on is the reform act to Renters Reform Bill and the impact this could have for landlords on the rights they would have over the properties they own.

Finally, and perhaps most importantly on the minds of first time buyers. Interest rates. At time of writing we have started to see the first signs that some 5 year fixed rates could be starting to edge higher as the Bank of England held their base rate at 5% at Septembers meeting. While not all new borrowers will opt for a 5 year fixed rate, those looking to maximise their borrowing potential will often be tempted to fix for the longer term as lenders reward those borrowers with increased lending for the reward of staying with the bank or building society for a longer initial term. Especially with recent changes that up to 6 times earnings could be possible with the nations largest Building Society.

While the timing has to be right for you and your personal situation. These factors are certainly worth bearing in mind if you were looking to purchase your first home in the next 12 months.

If you’d like more information or would like to book an appointment with one of our mortgage experts call us on 0333 011 2520 or email enquiries@gloucestermortgagecentre.uk

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