The expert advice every first-time buyer should read

We know that getting ready to buy your first home can be a tricky path to navigate, particularly right now.

So that’s why we broadcast a live Q&A with our very own property expert Miles Shipside – one of our founding directors and a BBC News regular.

We had a number of questions from first-time buyers, and if you’ve time to watch the full Q&A you can do so here. If not, let’s jump to some of the highlights…

Is it worth looking for my first home while the market is paused?

Many of you had questions about whether it’s even worth looking for a home on Rightmove at the moment, and whether estate agents are operating, and to what extent.

The short answer to both is: yes.

There’s plenty of supply, as the vast majority of people selling their homes before lockdown have decided to keep their properties on the market. The number of available properties after lockdown, compared to before, has only dropped by less than 3%.

Agents have been impacted by current circumstances, of course, and are limited in how much they can do whilst in lockdown and cannot show you around any properties in person. But most agents are still operating, at least to some extent, and will be able to help you get things in place – ready for when the restrictions are lifted.

Most will be working from home, and may take a little longer than usual to get back to you, but if you are interested in a property that’s available on Rightmove, it’s worth sending an enquiry through.

What’s the market looking like for buyers?

Political uncertainty over the past few years caused many people to hold back in making decisions about buying or selling homes. So when Boris Johnson was elected with a majority government in December, combined with low interest rates and freely available mortgages, many home-movers felt the time was finally right to move ahead with their plans.

This release of pent-up demand meant that the market was looking rather active and buoyant at the beginning of 2020, with a high increase in agreed sales (11%), and record-breaking traffic on Rightmove.

With demand outstripping supply, too, asking prices were creeping up gently, with a 2-3% increase compared to the same period last year.

But lockdown has placed all of this on pause. There is plenty of supply available, and we know demand is there, but there are less transactions, or sales, happening, as you would expect.

However, there are still millions of people searching on Rightmove, and enquiries being sent to estate agents.

Will house prices drop?

This was the most popular question. We saw a contrast between homeowners worried prices would fall, and first-time buyers hoping they would.

However, there are some key differences between the economic situation that we are in now, and that of other downturns – such as back in 2008 – which caused house prices to fall.

One of those differences is that mortgages, particularly low-deposit mortgages, are still readily available today. While this is in place, there will be buyers lining up to get on the property ladder, and it is this demand that keeps house prices stable.

So far, there has been no notable change in asking prices, but we’ll get a more accurate picture once we’re out of lockdown and there has been some time for new properties to come to market.

Perhaps the most likely outcome will be a flat period for some time, and slowly, as home-movers resume normal life, demand will return and begin to push prices upward again.

It is reasonable to believe that much of that pent-up demand will kick in before long, but how much that will impact prices will depend on how many properties are coming to market.

Isn’t it better for first-time buyers if prices fall?

Although many of us tend to pay a lot of attention to asking prices, there are other important factors that must be considered.

For example, the availability of mortgages and interest rates are hugely influential. How easily banks make mortgages available, and how much they lend (known as the loan-to-value ratio) are key factors in determining whether buying will be affordable.

At the moment, banks are lending, and in some cases offering mortgages covering up to 95% of the property value, meaning that some first-time buyers may be able to own a home with a deposit of just 5%. And as for interest rates, they are at an all-time low.

The combination of these two factors, along with employment rates, could be far more important than a difference of a couple of percentage points on house prices, especially if you are thinking of buying property as a long-term investment.

So should I buy now or wait until later in the year?

That will depend very much on your circumstances.

Maybe you were in a good position to buy before lockdown, and now your financial situation has changed, and you are not sure anymore.

It may be wise to take your time, and make sure you have everything in order before you start looking again.

But if your situation is still stable, it may very well be a good time for you to move forward with your plans.

Or perhaps you had gone further and had an offer accepted on a property? Unless things have changed and you can no longer afford to buy that property, the lockdown does not mean you have to pull out of the deal.

In fact, the government’s advice is that, as much as possible, deals should be paused, not cancelled.

Why not use the time in lockdown to research what you can afford?

Top tip: We have a handy guide to sorting out your finances

Top tip: Check out our full mortgage guide


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