NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

Is now a good time to buy a house?

Is now a good time to buy a house?
Image source: Getty Images


It’s normal to feel thrilled when you decide to buy a house. After all, buying a house gets you on the property ladder and gives you access to more space and comfort. However, buying a house during particular periods or when you’re in certain circumstances isn’t always the right decision. Is now a good time to buy a house? We take a look.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

What is the average house price in the UK?

According to the Office for National Statistics, the average house price in the UK increased by 10.2% over the year to March 2021. This is also an increase from February 2021, which indicated a 9.2% compared to February 2020.

England reported a 10.2% increase to an average of £275,000, Wales an 11% increase to £185,000, Scotland a 10.6% increase to £167,000 and Northern Ireland a 6% increase to £149,000.

Why do UK house prices keep going up?

To help support the housing market affected by the Covid-19 pandemic, the government implemented a number of initiatives to make buying more attractive. These initiatives fuelled demand for houses, which in turn caused house prices to keep rising.

How has the government helped the housing market?

The government has supported the housing market through initiatives like:

1. The stamp duty holiday

The stamp duty holiday was implemented to help home buyers afford properties during the Covid-19 pandemic. During the holiday, property buyers have not been required to pay stamp duty on properties valued at up to £500,000.

The stamp duty holiday is due to end on 30 June 2021. From 1 July 2021 to 30 September 2021, the threshold will reduce to £250,000. You can use the stamp duty calculator on the gov.uk website to find out how much you could save.

2. Relief for first-time buyers 

If you’re a first-time buyer interested in purchasing a property with a value of no more than £500,000, you will eligible for stamp duty relief from 1 July 2021. No stamp duty applies to the first £300,000, but 5% stamp duty applies to the remaining £200,000.

3. Generation buy and the mortgage guarantee schemes

Generation buy means helping young adults to buy rather than rent property. In April 2021, the mortgage guarantee scheme came into effect to help make this possible.

Many first-time buyers can now get on the property ladder with only a 5% deposit. Lenders who have signed up for the scheme are offering 95% mortgages backed by a government guarantee. 

Is now a good time to buy a house?

Buying a house at any time should be driven by your unique circumstances, whether the deals available are right for you and whether it makes financial sense. Taking on a mortgage you can’t afford can lead to far-reaching consequences. It makes a lot of sense to evaluate your unique circumstances first.

Before starting the buying process, speaking to either a financial adviser or a mortgage broker might be in your best interest. They can help you evaluate your financial situation and circumstances and inform you with certainty whether a particular opportunity is right for you.

It may also be important to note that there are particular times of the year when it might be cheaper to buy a house. These times, coupled with government initiatives, could present an excellent opportunity to afford a house.

However, even during such times, evaluating your financial situation and unique circumstances should always come first.

Was this article helpful?
YesNo

4 iron-clad rules for saving money on everything

Our Editor Sam Robson has been on a personal cost-cutting mission for years – and it’s time to share his wisdom.

Check out his choicest saving tips and tricks in this free report, “Sam’s 4 Iron-Clad Rules For Saving Money On Everything”.

Just enter your email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.