Is Now a Good Time to Buy A House
Fri 01 Jul 2022
Alanda Mercer, Part-time Negotiator
Is now a good time to buy a house?
Some people, especially first time buyers, will be hoping house prices will dip. But there is no guarantee that will happen.
There are also some homeowners who are holding off selling due to a lack of housing supply, therefore adding to the problem. The scarcity of houses up for sale means buyers often end up in bidding wars to secure a property.
While there is still plenty of uncertainty, the property market has proven to be very resilient in challenging circumstances.
Interest rates are expected to rise in order to guard against further increases in inflation, but this could dent confidence in the housing market.
Experts think the kind of house price rises that we have seen over the past 18 months are unsustainable, but no one has a crystal ball.
If you can afford to buy a home now and you plan to live in it for several years, you should bite the bullet. There is no point in waiting for a drop in prices which may not happen over the next year or so.
Relaxing of affordability rules for mortgages
The Bank of England wants to make it easier for home buyers to take out mortgages by ditching one of its affordability rules. It will consult on removing the rule in the first half of 2022.
As it stands lenders currently have to check that borrowers would be able to afford a 3 percentage point rise in the interest rate on top of their lender’s SVR (standard variable rate).
Introduced in 2014, this rule was designed to stop the banks from suffering hefty losses if borrowers ran into financial difficulty and couldn’t pay off their loans. It is estimated that 6% of borrowers have to take out smaller loans because of the rule.
Article taken from Sunday Times. For the full article please click on the below link: