It is a difficult situation to be in, but one that we see for a long time. The dilemma between renting and buying. According to a recent survey by Halifax, 372,000 first-time buyers made the move to the real estate ladder last year. This equates to half of all home purchases with a mortgage. This is the first time since 1995 that first-time buyers account for such a large share of the market, demonstrating the strength of the first-time buyer market.
Climb the property ladder
People who move house are often hesitant to make the leap (eg, “I like my neighbors, but I’d like an extra room”). This is the opposite of most prospective first-time buyers who, if you ask them, aim to climb the property ladder one day. There is a real determination with them.
As a result of this drive to own homes, they are often undeterred by external factors such as ongoing political events. While the housing market goes through ups and downs, this hardly ever stops people from climbing the property ladder.
Buying a property should always be classified as a long-term investment. And while it may not be ideal if your home’s value goes down, history suggests that when that happens, prices go back up in the long run.
So is buying always better than renting?
Well, no, not necessarily. Mortgages are not always the right answer. It may surprise you, but we regularly encourage young people to rent when they first move house, especially if they are a couple. This is so they can determine what kind of property they want and whether they can live together. The downside is that while you’re paying rent, it’s harder to save for a deposit, kind of like a stuck situation.
It’s also worth noting that getting out of a mortgage can be difficult and sometimes expensive. Therefore, you need to be sure that things are going to work out well before committing to one.
Small Deposit Mortgages
95% mortgages are more available now than ever before. If you are more than halfway to saving the 5% deposit, then it is worth trying to get an Agreement in Principle. This will help you verify that you will be eligible for a mortgage when the time comes.
