Property experts explain whether you should buy a house now or wait until next year

The property market has weathered a wild few months thanks to the coronavirus pandemic and stamp duty holiday.

House prices rose £2,509 this month, pushing the average cost of a home to a new record high of £336,073.

But there are early signs the market is starting to slow down, according to experts.

Rightmove, which compiles a monthly house price index, said the June rise of 0.8% was significantly smaller than the 1.8% increase in May.

The jump was even bigger in April, when a 2.1% rise was recorded.

Experts say record low interest rates – some that are now below 1% – and the stamp duty holiday are behind rocketing house prices.

However, some of that demand has now been met, they say, with the stamp duty holiday being phased out from next month.

At the moment, buyers of houses in England and Northern Ireland worth between £125,000 and £500,000 pay no stamp duty if it is their main home.

That payment holiday was meant to end on March 31, but was extended to the end of June in the Budget on March 3.

From July 1 until the end of September, house purchases worth less than £250,000 pay no stamp duty.

Then from October 1, the original stamp duty threshold of £125,000 will apply again.

With more changes afoot, we’ve asked some experts to give us their verdict on whether you should buy now or hold off until 2022.

Should you buy now or wait until 2022?

Of course, no one can predict how the property market will fluctuate over the next few months, or if prices will continue to increase or fall.

It all depends on your personal circumstances – and experts say there are a few questions to ask yourself when making that decision.

Rachel Springall, finance expert at Moneyfacts, told The Mirror that rising house prices will have different impacts for first time buyers and those looking to remortgage.

Remortgaging customers may find they now have more equity in their home and could be better off changing their deal.

But for first time buyers, it means their deposit may not go as far, as a bigger asking price means you’ll need a bigger deposit. That means you might be better off holding out.

You may also may find yourself in negative equity if house prices fall, Ms Springall warns, and may be better off waiting to build up your savings.

She said: “If first-time buyers have a 5% deposit to get their foot onto the property ladder, then they will find deals returning to the market after a notable absence.

“However, whether it is the right time for them to commit must be considered carefully because house prices could fall and leave borrowers in negative equity.

“Borrowers who have a limited deposit or equity may wish to spend more time building a larger pot and wait a little longer before they commit to a mortgage.”

Ms Springall also notes how a bigger deposit percentage generally means lower rates, as well as lowering your monthly mortgage payments.

The average rate on a two-year fixed mortgage at 90% loan-to-value is 0.53% less than that at 95% LTV.

Meanwhile, the average rate on a two-year fixed mortgage at 75% loan-to-value is 0.38% less than that at 80% LTV.

She said: “Clearly, stretching to just 5% more could entail some substantial savings on mortgage repayments by moving down the next loan-to-value bracket.”

As for those who are tempted by sub-1% mortgages, Ms Springall urges caution and says buyers should assess any fees attached to determine whether they’re getting the best deal for them.

Typically, these types of rates are generally for borrowers who have a decent amount of equity in their home and an immaculate credit rating.

But ultimately, rather than trying to time the market for the best price, buyers should just focus on their individual circumstances.

This is according to Sarah Coles, personal finance analyst at Hargreaves Lansdown, who says that short term falls – should house prices drop – aren’t the end of the world if you’re expecting to live in the property for a long time.

Should you have to make compromises you’re not happy with, or you get caught up in a bidding war that has pushed up the price beyond what you’re willing to pay, then you may want to hold off.

She said: “Likewise it might make sense if you haven’t saved enough of a deposit to make the mortgage affordable, or if you’re concerned about the immediate outlook for your job.

“But there similarly might be very good reasons to get on with it, especially if you’re living somewhere that’s making you or your family unhappy.”

If you’re first-time buyer and want to push ahead with your property purchase this year, we’ve rounded up all the help available.