Q. I am thinking of buying my first property, and the deposit isn’t a problem - but with the market the way it is, surely it’s better to wait?
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A. Ah, to buy or not to buy – that is the question! If you are not actually under any particular pressure to buy now, then why do it - when in a few months’ time the same property may cost you less?
The trouble with that argument, of course, is that you could go on using it ad nauseam. If prices are lower in 6 months or a year, then who’s to say they won’t go lower still if you wait even longer?
In fact, now is actually a good time to buy. For one thing, research by property website Zoopla shows that buying is already 15% cheaper than renting in 94% of British towns. Of course, much depends on what type of property you rent or buy, and in what area. Nevertheless, for those in a position to get a mortgage, like you, buying now makes a lot of sense. There are, for example, some quite reasonable mortgage deals around at the moment for first time buyers with a 10% deposit. And who can predict how long that will remain true? Even if prices do continue to soften, the uncertainty in global financial markets means that money could well become a lot tighter – which means that high LTV loans in particular would become considerably more expensive.
However, the real clincher is that the Stamp Duty holiday on properties up to £250,000 is due to come to an end on March 31st, when the old starting point of £125,000 is reinstated. This means that after that date, buying a typical first time buyer property for, say, £175,000 will cost you an extra £1,750 in tax alone.
So, my advice is quite simply to buy now. All you need to do is think of it as a long-term investment, rather than as a way of making a fast buck. And besides, you’ve got to live somewhere – so go for it!