House prices have been continuously growing throughout 2021. If you are planning to buy or sell a home, you’ll want to know what is likely to happen to house prices. Will the constant rise continue? This could determine whether or not it is a good time for you to move home.
What has caused the rise in house prices?
The housing market has been on a bit of a rollercoaster journey over the past 18 months. It suffered a significant slump in Spring 2020 as the UK entered its first lockdown. When things started to open back up again, it saw a huge resurgence. This was certainly helped by the government’s introduction of the Stamp Duty holiday. However, there has been a massive demand to jump on the property market before the stamp duty holiday ends. In turn this has caused house prices to rocket – almost negating the savings being made on the stamp duty tax.
Inflation in the housing market has also been helped along by historically low rate mortgages. Lenders have also increased availability of higher loan to value mortgages. This has subsequently opened up the market to more first-time buyers with lower deposits.
Is now a good time to move home?
The surge in house prices are definitely making this a seller’s market. If you have a property to sell then this could be a great time for you. Evidence shows that, despite the stamp duty coming to an end, demand for property is still outstripping supply. House prices are likely to remain elevated whilst this is still the case.
Sellers are encouraged to act whilst the market remains hot, in order to get the best possible price. With competition in the property market remaining low, sellers can negotiate higher offers. However, sellers should be wary of starting out too high. Although demand is high, buyers are still still price-savvy. A higher starting price could put off that initial surge of interest that new homes to the market usually experience.
Unfortunately this means that as a buyer, your chances of finding a cheap property are low – although low mortgage rates are in a buyer’s favour.
One thing that has the potential to change the market is a rise in the Bank of England’s base rate. The rate was slashed at the start of the pandemic, however with inflation slowly creeping up due to a resurgence in the economy, we could see an increase in this before too long. This will mean a rise in mortgage rates, making monthly repayments more expensive and could limit the amount that lenders are willing to lend. If buyers are keen to get onto the property ladder, then they may need to move quickly to secure the record low rates and maximise affordability.
How can I access low mortgage rates?
Whether you’re looking to buy a home, or you’re selling a property to move home, then you’ll want to make sure you get the most competitive deal on a mortgage. Mortgage rates are at an all time low, so securing a deal now could save you money in the long term, and locking into a deal could protect you against any future rate rises.
Speaking to an independent mortgage broker can help you to find the best deal for your circumstances. Get in touch with So Smart Money today to speak to one of our mortgage experts.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE