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First-time buyer: Now is the right time to buy?


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On 1 September, the Bank of England released figures for mortgage lenders and administrators for the second quarter of 2021. Sarah Coles, personal finance analyst at Hargreaves Lansdowne, reviews mortgage data and finds that first-time buyers have helped record FOMO mortgage payments higher since the financial crisis. So, if you are a first time buyer, now is the right time to buy? I take a look.

What are the main findings of the report?

The Bank of England reviews mortgage activities every quarter from data provided by about 340 regulated mortgage lenders and administrators. It then publishes its results through the mortgage lender and administrator returns. Here are the key searches for Q2 2021:

  • The total amount of mortgages borrowed between April and June was about billion 1 trillion, the highest since 200 since.
  • .4..4% These mortgages were taken by people who bought a house to live in instead of selling or living.
  • Of the 66.4%, 24.7% were first-time buyers, up 6.5% from the same period a year earlier.
  • The value of new mortgage commitments for next month is .6 85.6 billion, which is about 2.5 times higher than a year ago, but still lower than the peak of 2020 Q4.

What are the benefits of being a first time buyer?

First-time buyers are exempt from stamp duty on properties worth up to £ 300,000. For properties valued between £ 300,000- £ 500,000, they pay only 5% stamp duty. However, if they purchase a property worth £ 500,000 or more, they will not qualify for this discount.

With the current average price of a home being 262,954 (August 2021), it is unlikely that a first-time buyer will have to pay stamp duty.

The government has also introduced a number of schemes to help first-time buyers climb the property ladder. You can visit the website at ownyourhome.gov.uk to learn more.

Should first-time buyers buy in 2021?

Mortgage promises for next month indicate a slight decline in sales, which means home sales could be easier after a record high in August. Demand from buyers at the end of the stamp duty holiday has seen a decline in home sales.

However, statistics reveal that the real power remains in the first-time buyer market. Data show that first-time buyers make up a significant proportion of mortgage recipients more than at any other time since the onset of the epidemic.

This could be the government’s homeownership scheme, government guarantees for higher loan-to-value mortgages, lower mortgage rates, and some buyers being able to save more money during lockdowns.

Also, according to Sarah Cole, as home prices rose, FOMO forced many aspiring buyers to sink before prices were out of reach.

So, should first time buyers buy in 2021? The data shows that many things are currently in favor of first-time buyers, and taking advantage can be a wise thing to do. However, keep in mind that the ideal time to buy a home is always when your circumstances allow you to do so.

If you are ready to go bankrupt, check out our mortgage guide which has tools and guidelines to consider when applying for a mortgage. And since this is your first purchase, it is always a good idea to consider the services of an independent financial advisor.

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