Buying a property is a major life milestone and something for which nearly every young household is actively aiming. But buying a house is a notoriously difficult thing, particularly at present. Property value inflation over time has not been matched by wages, making it more of an investment than ever – and with market chaos at present, it can be difficult to know when exactly to buy. What factors should the first-time buyer be considering before making a move on a property?
Market Conditions
The first place to which you should be looking for clues is the housing market itself. Property values and their recent trends can give you some major insights into the potential near future of the market, and the potential affordability of your ideal property.
Rapidly fluctuating prices indicate a volatile market and one which could pose some difficulties during the buying process. For example, you might start the buying process with a seller, who then re-adjusts their asking price according to changes in market rate – taking the property out of your budget, and causing any money already spent on a solicitor or survey to have been wasted.
Local Factors
There are also local factors at play. Indeed, any fluctuations in price might be on a local level, with the adjusted market value of neighbouring properties influencing the decisions of any sellers. It is also the case that local amenities like schools and transport links have a direct impact on house prices – an impact that can multiply with rising demand.
Not all factors are negative, though. The construction of new-build homes in a region might reduce pressure on the market, mitigating the impacts of high demand against low supply and providing an opportunity for realistic market values to be set.
Interest Rates
Tangentially to housing market conditions, there are other financial factors that can have meaningful consequences for first-time buyers. Chief amongst these, particularly at present, are interest rates. It is not necessarily the value of a property that indicates affordability; mortgage interest rates play a major role here, where rising interest rates can make repayment difficult. With rates currently rising against falling property value, the risk of negative equity is very real.
Personal Factors
Finally, there are personal factors at play in any property-buying decision. If you are buying with a partner, your combined salaries are the primary factor in the size and shape of the mortgage for which you can be accepted. These also need to be stable in order for you to continue making payments – or to weather rises in rates. If you are starting a family, your need for your own space could be hamstrung by rising costs associated with raising a child.
Ultimately, there is no objective ‘best time’ at which to buy a home. As we have discovered, there are a great many variables to consider when buying a property, some of which are entirely subjective and unique to your personal situation. When you buy is your decision and yours alone, but the above considerations can help you make a more informed decision when the time comes.
