When is the right time to buy a property?

It’s one of the biggest purchases you will make in your lifetime, but knowing when is the right place or right time to buy a new property can be a challenge to get your head around. 

Like all markets, there are highs and lows in property, so the precise time you get on, or move up, the housing ladder can influence whether you get a good deal on a property, but also your mortgage repayments or even how much tax you pay.

The property market tends to be quieter in December and January when consumers have different spending priorities. By starting your search early (now!) and making an offer on a property at this time means you are likely to secure yourself a bargain.

However, buying and selling habits change year-on-year, which can influence the housing costs during specific months of the year.

Summer tends to be a quiet time for house sales, but following the lockdown in the spring, where non-essential moves were banned, the property market saw a massive £37billion worth of sales. 

With the stamp duty holiday in place until March 2021, there’s arguably never a better time to purchase a new home. The Government's stamp duty holiday wipes all stamp duty tax on properties worth less than £500,000. The holiday means 9/10 people getting on or moving up the property ladder will pay no stamp duty tax at all, with a potential of saving up to £15,000. 

Mortgage borrowing rates in the UK are lower than they have ever been before. The Bank of England has made two cuts, firstly a 0.25% cut just before the budget and now an additional 0.1%. While this might be bad news for savers, it will save new buyers and those remortgaging a lot of money in the long term. 

Due to the huge increase in property prices in the past year (2.71% in the past 12 months) and banks tightening the purse strings when it comes to the amount people can borrow, it’s not a first-time buyers market right now. 

Whilst the stamp duty could save you up to £15,000 on tax, you may be required to put down a much larger deposit in order to secure a mortgage. 

Many property professionals are suggesting first-time buyers hold off until the spring when competition is expected to drop. Boris Johnson has also recently promised to introduce a scheme to allow first-time buyers to get a mortgage with just a 5% deposit, turning generation ‘rent’ into generation ‘buy’.

It depends on your situation, the stamp duty holiday is guaranteed until the end of March 2021, so it will undoubtedly be cheaper to buy now rather than in a year's time.

However, if you’re a first-time buyer it might be worth holding off until April 2021. Whilst you’ll be subject to stamp duty, under normal circumstances you’ll receive relief on the first £300,000 for being a first-time buyer, meaning if your property is worth less than that you’ll pay no stamp duty anyway!