This article takes a slightly deeper look at the housing and property market in the UK. In particular, what will first-time home buyers (FTBs) do? Is it cheaper to buy or rent a house? We have tried to answer this question in this article.
At a Glance for First-Time Buyers (FTBs)
Favorable Market Conditions
The market conditions are very good right now and it is a great time for those interested in buying a home. Buying a house has become easier for FTB (First Time Buyers) as houses in the UK are being sold. Almost a third (that’s almost 150,000) of homes currently for sale are eligible for FTB. This means that the monthly EMI you will have to pay for these houses will be less than the rent for the same type of houses. Buying a house instead of renting for FTB will save £93 per month.
Urban Areas Offer Budget-Friendly Options
If you think that houses are expensive in cities then you are wrong. In fact, cities for FTB are good places to buy houses. In cities like Manchester, Newcastle, Southampton and Sheffield you will find houses that fit your budget. These cities have a large number of flats (which are the most common type of property in these cities) and are cheaper to buy than to rent.
So, if you are a FTB and looking to buy your own home, now is the perfect time! There are many good offers available in the market and you are sure to find the right home in your budget and needs.
Where to Find the Best Deals
The North and Scotland Lead in Affordability
For new home buyers (FTBs), the best destinations are the North West, North East and Scotland. More than 40% of houses in this area can be availed with less EMI than rent. This means you could save between £240 and £425 every month!
However, keep in mind that housing prices in this area are rising quickly, so buying these homes in the future can be expensive.
Difficulties in the South and Midlands:
Buying a new home in the South West and East Midlands is difficult. In these areas, only 25% to 33% of houses can be obtained with EMIs less than rent. This is because housing prices are high and borrowing is expensive.
Things to consider while choosing a venue:
- Home Cost: Consider how much you can afford to borrow.
- EMI: Consider how much you can afford to pay every month.
- Appreciation potential: Consider how much the house is likely to increase in value in the future.
- Employment opportunities: Consider where you can find work.
- Amenities: Think about what amenities you want nearby.
London’s Unexpected Advantage: Flats Offer a Path to Ownership
Although famous for its high housing costs, London offers many good opportunities for first-time home buyers. More than half of homes for sale in the capital can offer monthly mortgage repayments lower than rent.
What is behind this? While rent prices in London have risen significantly in recent years, house prices have remained relatively stable.
Therefore, most houses in London are cheaper than rent. This trend is seen across the UK – flats generally offer lower purchase prices and lower monthly mortgage repayments than houses.
Additional Considerations for FTBs
Buying a home can be a good financial decision for long-term security. But, it is not right to make a decision while buying a home just by looking at the monthly EMI. It is also important to consider your personal situation.
Other Important Factors:
- Job stability: If you are likely to change jobs or move to another city soon, buying a home now may not be a good idea.
- Future Plans: Think about what changes might happen in your life. If you are going to get married soon and raise a family, then buying a small flat is not a good idea.
- Market Changes: House prices fluctuate. So, keep in mind that the value of the house is likely to fall and consider the impact it will have on your investment.
Resources for FTBs
Government Schemes:
There are many government schemes available to help first-time home buyers. This includes schemes like “Help to Buy” where you can get financial help for your deposit.
Mortgage Pre-approval:
Get pre-approved for a mortgage to find out your borrowing capacity and how much affordable housing is worth to you.
Hidden Costs:
Consider the additional costs that come with buying a home, such as maintenance costs, property taxes, and homeowners insurance.
Consider the above information carefully, do your own research and consult a financial advisor. This will help you decide whether buying or renting is right for you at this stage in your life.
Remember: There is no single correct option. The best option for you depends on your personal circumstances and financial goals.