Advice for Aspiring First-Time Buyers Who Are Currently Deciding Between Continuing Renting or Buying - from a Mortgage Broker

Written on 7 September 2023 by Nick Mendes

Advice for Aspiring First-Time Buyers Who Are Currently Deciding Between Continuing Renting or Buying - from a Mortgage Broker

Asking a mortgage broker whether now is a good time to purchase a home might seem like an inevitable one-sided answer. The cynic within me even smiles at the thought of someone reading my response.

Buying your first home or moving home for that matter can be a daunting prospect; the process from start to finish can be a series of obstacles and meticulous planning as well as seemingly endless sleepless nights worrying. Is now the right time? Do I need to do any work on the property straight away? Have I got enough money saved to cover it?

The simple matter is buying a property is a long term investment - even if you’re planning to flip the property in a few years’ time to upsize you need to ensure that you have fully factored in all the potential risks such as affordability, a downturn in the market, or your circumstances changing.

According to HomeLet, recent figures highlight that UK monthly rents hit another record high, averaging £1,261 in August, up 1.4% from a month ago. With rents continuing to increase due to lack of stock and high demand there are no signs of slowing down.

Purchasing a property provides you with more security than renting and allows you to invest in your future by building up equity - rather than lining someone else’s pocket.

Yes, it’s important to consider that mortgage payments have increased. But this isn’t as dire as is made out. Even now, mortgage payments remain broadly in line with average rates from over the last 15 years. In fact, it’s only the last 5 years where we have seen rates continue to fall to the point that they were no longer sustainable, thus they shouldn’t be used as a benchmark to measure affordability.

While there may be options to reduce monthly payments such as extending the term or opting for part interest-only and part repayment, these aren’t always the perfect solutions as each carries their own risks to be considered. Therefore, they shouldn’t be treated as the default approach when establishing your budget.

Trying to pinpoint the right time to buy a home is impossible. For example, if rates were to fall in a years’ time, would the property you desired still be on the market? If property prices were to fall, you could find yourself with equally likeminded prospective buyers, all bidding on the same property.

For this and many other reasons, property ownership is an emotional purchase. If the property fits your needs in addition to your future aspirations and remains affordable then now is the right time to buy. Property values fluctuate, but history shows that UK property value will inevitably increase, thereby allowing you to make a profit on your initial contribution and provide you with more options for the future.

Category: Nick Mendes

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