First Time Buyer, is it a good time to buy in 2024?
By TMG | 10th October 2024
The average house price rose from £192,138 in January 2015 to £289,723 in July 2024, according to the House Price Statistic. Property prices have risen by 0.6% compared to the previous month, and risen by 2.2% compared to the previous year (Landregistry 2024). If the house prices are statistically rising, then generally now is still a good time to buy. However, there are more variables that should also be taken into account when it comes to purchasing your first property.
Bank of England base rate
This is one of the most important rates in the UK. The Monetary Policy Committee (MPC) decides what action to take. The announcement happens eight time a year or roughly every six weeks. If you plan to borrow money from banks or lenders, the effects of the bank rate (base rate or base interest rate) are something you need to consider. As of 19 September 2024, the current bank rate was set at 5%, the MPC voted by a majority of 8-1 to maintain Bank Rate. One of the members preferred to reduce the rate by 0.25% to 4.75%. The next MPC meeting will be on the 7 November 2024.
First Time Buyer
For First Time Buyers, there are incentives that can help you get closer to achieving your dream house. If you are in the very first stage of saving for a deposit, Government Lifetime ISA can help you save up to £4,000 per year and the government will then top up your savings by 25%.
If you have already started saving with Help to Buy ISA, you can pay into the ISA until November 2029 and claim the government bonus by 1st December 2030. ISA funds are transferable, you can transfer money from a Help to Buy ISA to a Lifetime ISA. If you transfer money from a Lifetime ISA to a Help to Buy ISA, you'll have to pay the 25% withdrawal charge. For more information about Help to Buy ISA and Lifetime ISA please visit Gov.uk
If you are a key worker, you might be eligible for the First Homes scheme. Developers offer these homes to first-time buyers with at least 30% of the market value taken off the price. Read more https://www.gov.uk/first-homes-scheme/how-the-scheme-works.
Stamp Duty Land Tax
If you decide to buy a house or property, you might be subjected to pay SDLT.
For first time buyer:
- there is no SDLT up to £425,000
- 5% SDLT on the prices from £425,001 to £625,000
However, if the price of the property is above £625,000 you will not benefit from the relief and will follow the rules for second time buyer. As a first-time buyer, if you are going to buy a property with someone who has bought a property before, you won’t be eligible for the first-time buyer relief.
Other factors
Regardless of whether it’s the right time to buy, various factors like relationships, employment, inheritance, and life events play a significant role in purchasing your first property. Owning a home provides stability, reducing worries about eviction and allows for personal customisation. Purchasing sooner allows you to start paying off your mortgage instead of rent.
Source:
Landregistry,. (2024) House price Index. Available at: https://landregistry.data.gov.uk/app/ukhpi/browse?from=2014-09-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2024-09-01&lang=en (Accessed 9/10/2024)
Bankofengland,. (2024) Interest rates and Bank Rate. Available at: https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate (Accessed 09/10/2024)
