Why Now Is A Good Time To Buy A House
Whenever you are looking to buy a new house there will be factors which play on your mind as to why now might not be the best time to buy. Truthfully, these factors will always exist. But if you let them stop you, you will never end up buying a new house at all! This is why, in a weird paradoxical sense, the best time to buy is usually as soon as you can. The sooner you have your new house sorted, the sooner you will have that peace of mind that this aspect of your life is sorted. Additionally, just as there might be negative factors playing on your mind, there will be positive factors out there too! This article will lay out some of the factors which make now a good time to buy a new house, as well as some helpful tips on actions to take if you cannot quite afford one yet.
No Stamp Duty
One big reason as to why now is a good time to buy property is that there is no Stamp Duty Land Tax (SDLT) on purchases of homes up to £500,000. Moreover, properties costing more than £500,000 will only pay the Stamp Duty rate based on the value of the property over £500,000, making stamp duty very cheap at the time of writing. This scheme can save you thousands of pounds. However, it expires at midnight on 31st March 2021, so there is not much time left to take advantage of it. If you are already in the process of buying you should hopefully complete your purchase within the time bracket, but if you are starting from scratch you may need to hope for an extension of the scheme. In an effort to help aspiring new home owners during COVID-19, there is speculation of extending the stamp duty holiday even further, so keep an eye on how that develops.
If you wait until the SDLT holiday ends, you risk facing even higher prices than you are seeing now. Saying this, it is important to not panic and rush into a commitment you are not ready to make. There will always be great government schemes out there to help prospective homeowners.
Get Out Of The Rent Trap
Before owning property, unless you are living with family you might see renting a place to live as a logical option for the short-term. While this is correct, I emphasise the use of short-term. It can be easy to see monthly rent prices and think “I can afford that”. This is a very dangerous way of thinking, because when you live in a place you are renting, you are essentially losing money with nothing to show for it.
Renting is a good way to get used to living away from the family home while you may not yet have the funds for a house, but it should not be seen as the best long-term solution. A house is a great long-term solution because you will own property and, perhaps more importantly, the value associated with it.
Help To Buy Equity Scheme
The new Help to Buy equity loan scheme (April 2021 – March 2023) is a loan from the government that you put towards the cost of buying a newly built home. First time buyers can borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the full purchase price of a new-build home. There are different equity loan price caps for the different regions of England, which can be found on the Help to Buy website.
This government scheme is a fantastic way for first time buyers to get onto the property ladder. As it lasts until 2023, it also provides a lot of time for those of you who are looking to buy in the coming years but not quite yet.
To take advantage of this equity scheme, you must buy your home from a homebuilder registered for Help to Buy: Equity Loan. At Clarendon Homes we have provided many homes for people using Help to Buy, and we are looking to provide many more in the future. Around 80% of our customers bought our Ivy Court properties through Help to Buy, showing how popular the scheme is amongst prospective new homeowners!
If you cannot quite afford a house…
There are a lot of costs involved with buying a new home, many of which come even beyond the initial price tag. If you cannot quite afford a new house, there are plenty of appropriate actions you can choose to take:
- Try to start saving. There are several ways to do this, from simple everyday changes in an effort to budget better, to Lifetime ISAs which can help first time buyers gain extra money towards their first home. Everyone’s personal situation is different, so do what is best for you. If you would like advice on what to do with your money, try reaching out to friends, family or financial advisors who can help guide you in the right direction.
- Have you considered shared ownership? This is a part buy, part rent scheme, where you can own part of a property and pay rent on the rest.
- Look for any corporate or government schemes/bonuses out there which would help your personal situation. As well as taking personal steps to save money, there are plenty of money saving schemes out there to help you buy a new home, whether it be from the government or from individual businesses. Buying a new home is a huge deal, so it is important to do your own individual research to get the best deals available. There are plenty out there for you to find.