High interest rates, falling house prices and a cost of living crisis – headlines we have become increasingly accustomed to. It’s no secret that there has been a dark cloud over the property market for almost a year now and it feels as though every day there is something else holding people back from buying a home. However, it all comes down to perspective.
Interest rates are now the highest they have been since the crash – a worry for people currently on low rates and nearing their mortgage renewal – but what about those looking to enter the market? With rents rising by 5.1% on average1, non-homeowners are still feeling the squeeze on their pockets. So, if it is affordable, why wouldn’t you start the process to becoming a mortgage-free homeowner?
Affordability remains a central concern to consumers. With rising rates and increased cost of living, the amount you can borrow is down 20% on average.2 While this does have a significant impact on consumers looking to maximise their borrowing, for those more conservative would-be homeowners, it highlights the importance of a good broker − someone who can do the legwork and find a lender who can not only provide the borrowing required, but ensure it’s the best deal available for the customer’s particular circumstances.
Falling house prices is a key feature of a buyers’ market. With the average house price down 2.6% in June compared to the year before3, you can arguably get more for your money now than you could 12 months ago. With HMRC reporting transactions are down 12% year-on-year4, there will undoubtedly be a number of vendors willing to consider lower offers to ensure quicker sales.
There is light at the end of the tunnel with inflation data better than expected.5 After the last few turbulent months, things are starting to move in the right direction which could see further base rate rises ease off if the trend continues − a benefit which newer homeowners could reap in the years to come.