Is it a good time to buy a property?
There's no perfect moment. Why it makes sense to buy when you can afford to.
For a few years now, clients have been asking me: "Is this a good time to buy my first property?" There is never a perfect moment, and recent years show it well. First came Brexit and the uncertainty it brought for Poles living in the UK, then the pandemic, when most people lost their sense of security, and then the tragic war in Ukraine. Those who decided to buy in recent years, despite the uncertainty, made the right call. And it wasn't the best of times.
If a lender says you can afford to buy, make the most of it.
A property is an investment
Property is one of the best investments there is. A home is one of the few purchases that gains value over time rather than losing it. So even a home you buy to live in should be treated as an investment. First, you're putting your hard-earned savings into bricks and mortar, which protects them from inflation.
Second, we all have to live somewhere. Why pay off someone else's mortgage when you could be paying your own? Every mortgage payment you make brings you closer to owning your home.
What about interest rates?
The fact that interest rates have risen recently can make people hesitate. But when rates rise, so do rents.
A mortgage is a long-term commitment. The average term is 25 years, and there's no way rates will stay low for that whole time. The economy will change several times over the life of your mortgage, so it's completely normal for that to show in your rate and your payments.
Start with what you can afford
Sometimes our dreams are bigger than our budget. Everyone would love a house with a garden, but sometimes we can't borrow enough. What you can do is buy what you can afford now, such as a smaller flat, and later sell it and buy the home you really want. Because you're paying off your own mortgage instead of someone else's rent, you end up better off. Over time, many people also let out their first flat and buy somewhere better for themselves.
Freedom, and something to pass on
Owning your home gives you more freedom. You decide whether to move or sell – and what colour to paint the walls. You don't have to worry about being served notice at the end of your tenancy or hit with an unexpected rent rise.
A home that grows in value over time is an asset you can pass on to your family. Owning one property also gives you the chance to buy another. You can use your equity, the share of the property you own outright, for example by remortgaging to release money for a deposit on another property.
So, is it a good time?
Buying a home has a great many benefits. Is it a good time? As good as any other. Which means it's always a good time.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.