First-time buyers can benefit from a strong housing market

New figures show that UK house prices have risen slightly – and that can be good news for first-time buyers.

According to details from building society Nationwide, the average house price in the UK rose by 0.4%.

Nationwide’s Chief Economist, Robert Gardner, commented, “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months.” 

Despite higher mortgage rates, Gardner commented that “consumer confidence has improved noticeably over the last few months”, reflecting that this is likely due to “solid wage gains and lower inflation”.

A strong market can give those waiting to get onto the property ladder an advantage, even though it might seem to do the opposite.

You might expect that in a strong market, first-time buyers lose out. But there are ways in which first-time buyers can benefit.

How first-time buyers can benefit from a strong housing market

There are a number of ways that first-time buyers have an advantage over home buyers who are looking to purchase a property. 

First-time buyer stamp duty

Usually, first-time buyers pay less or no stamp duty while people who are already homeowners must pay it. This is helping FTBs be a dominant force in the market.

The government offers stamp duty relief for first-time buyers. Anyone paying less than £425,000 for a property will pay no stamp duty if they’re FTBs. 

First-time buyer schemes

The various governments over the years have been committed to helping first-time buyers. Some might question whether that has worked. But it looks like Labour wants to continue to help people onto the property ladder.

At the moment, there are a number of first-time buyer schemes. One of these is the First Homes scheme. 

This allows some first-time buyers to buy a home for around 30% to 50% less than its market value. You must meet certain criteria but most people buying for the first time should benefit.

The scheme helps people get on the housing ladder and can give FTBs the advantage when buying a property over those who are already homeowners.

Other schemes include Lifetime ISAs that allow buyers save up to £4,000 a year with the government chipping in by topping it up by 25%. This is available for 18 to 40 year olds. There are also shared ownership schemes.

A desire to buy

Many homeowners will opt to stay put when property prices are rising. But sitting it out isn’t always an option for first-time buyers. Most are willing to move further afield or will be more open to new-build schemes than homeowners.

As a result, it can open a lot of opportunities for first-time buyers. Along with schemes and stamp duty relief, first-time buyers can sometimes access property that current homeowners can’t as they have no additional support.

Mortgage advice 

As the UK housing market continues to fluctuate, we can help you understand what it all means for you, your mortgage and home purchase. Get in touch with our team for advice.

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