Is turbulence in the housing market an opportunity for first time buyers?

Tuesday 15 November, 2022

First time buyers have recently been in a challenging position following the impact of the September mini-budget. Many mortgage deals, including first time buyer mortgage deals, were removed from the market by lenders. This has made it more difficult for first-time buyers to secure a mortgage, even after passing all the affordability criteria of the lenders. 

However, there have been movements within both the property market and mortgage market that have the potential to offer first time buyers an opportunity to get on the property ladder. 

House price predictions

Over the last 3 to 4 months, the property market has shown a decline in prices with NatWest backing this up and predicting that the price decreases are likely to continue into next year. 

This decline in prices could provide an opportunity for first time buyers to find a more affordable home, especially those who have already saved their deposit. 

Potential increase of houses available

The increase in interest rates has had a knock-on effect, with some small portfolio landlords choosing to sell their properties as the return on investment for them is not at a sustainable level. This sell off could result in an increase in housing stock, particularly those that attract first time buyers, therefore there will be less competition, with fewer buyers bidding on each property. 

Stamp duty freeze

The changes made by the government to the stamp duty threshold will certainly offer a better opportunity for first time buyers. For some, it will mean not having to find thousands of pounds extra to cover the stamp duty tax implications. 

In addition, the government’s changes also mean that first-time buyers can now claim First Time Buyer Relief on their new main residence. This will be up to a maximum purchase price of £625,000, an increase from £500,000.

Mortgage broker advice is important

Despite these more favourable changes for first time buyers, it is still very important to speak with a professional mortgage adviser to be able to secure a first-time buyer mortgage that meets your financial and life circumstances.

Thomas Oliver mortgage brokers frequently have access to first time mortgage deals that are not always available on the high street. Therefore, it will be beneficial to you for our mortgage brokers to review the wider mortgage market to help you make a fully informed decision.

Farrukh Jabbar, Mortgage Broker in Walthamstow and East London said: 

“The changes that have taken place can offer some new opportunities for the first-time buyer. It should be noted that mortgage lenders continue to use their affordability criteria for all new mortgage applications, so it will be important to have a professional mortgage broker help you with any application, to ensure you have access to a first time buyer mortgage that fits your personal circumstances.”

If you have decided now is the right time for you to buy your first property and would like to discuss your first-time buyer mortgage options, please call Farrukh Jabbar on 01707 872000, who will be happy to help to guide you through the most suitable first time buyer mortgage options for your specific financial situation.  

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