In this article, we break down whether it is worth buying a property in 2024, whether you are a first-time buyer or a home mover.
Table of Contents
Current climate
It appears that the housing market will undergo a shift in the new year, as the era of rapidly increasing house prices and low mortgage rates comes to an end.
As a result, people who are planning to purchase their first home or upgrade to a more expensive property will face a sluggish market and higher borrowing costs, while those who choose to stay in their current residence will encounter pricier rates when they decide to remortgage.
There is no clear-cut “good” or “bad” time to relocate, but conducting thorough research can minimize the possibility of making a financial mistake.
First Time Buyers
Buying your first home is a major decision, and prospective buyers should be aware of the following factors in 2024:
- The prices of houses will fall by up to 4% in 2024 as high-interest rates continue to affect mortgage affordability and sales completions.
- House prices fell 1% in the year to November, and the property prices for first-time buyers edged 0.5% higher in that period
- House prices are expected to fall by between -2% and -4% in 2024, given the broader economic challenges, and likelihood that little downward pressure on house prices continues.
- If house prices fall further and incomes increase, or mortgage rates fall back, affordability will improve for home buyers and this in turn will support sales.
- Inflation is falling again and the financial markets are pricing in cuts to base rate during 2024.
- Mortgage rates are falling already, with the typical 5 years fixed-rate 75% loan-to-value deal now below 5%, having been as high as 5.7% before July 2023.
It’s important to consider these factors and conduct thorough research before deciding.
Buyers who are able to provide a larger deposit will have more options available to them when it comes to getting on the property ladder.
While it’s possible to secure a mortgage with a 5% deposit, having a larger deposit makes you a less risky prospect to mortgage lenders. Consequently, lenders are likely to offer you lower interest rates on your borrowing.
To get the best knowledge, make sure you speak to an expert mortgage broker.
Even increasing your deposit from 5% to 10% can have a significant impact on the number of mortgage deals available to you, as well as the interest rates you’ll be eligible for.
Furthermore, having a bigger deposit can help protect you from negative equity, which occurs when house values drop and your property is worth less than the amount you owe on your mortgage.
Positives of buying in 2024
The affordability for home buying is expected to improve for better in 2024, basis the expectation is the repo rate cut during the year.
According to Mortgage Bankers, the interest rates are expected to drop to 6.1% by the end of 2024, so the potential buyers could be paying lower interest each month.
By taking rates, prices, and household income into account, homes should be about 5% more affordable by the end of 2024.
Buying a home this year, can provide the foundation for building wealth through property appreciation, rental income, and tax benefits, which contributes to a diversified investment portfolio.
Investing in home in 2024 may offer prospects for potentially yielding substantial returns on the investment over time and future appreciation for new home buyers.
The low mortgage rates can notably benefits for first time home buyers that increases the affordability and reduces the overall cost of buying.
In 2024, home buyers may find the wide range of options available, enabling buyers to choose a mortgage plan which aligns with your financial goals and risk tolerance.
Is moving home a good idea right now?
Moving home can be a big decision that comes with both benefits and risks. Before making any moves, there are several factors you should consider.
Falling house prices don’t necessarily mean disaster. Short-term fluctuations in property values may not notably impact on to the long-term investment values or overall property value.
2024 may be the perfect year for new home buyers to consider moving homes. Whether you are searching for more space, adjusting to financial shifts, and adapting to life changes, each of these are nudge towards reassessing your living situation
Setting a realistic asking price is key
In 2024, the housing market dynamics have shifted, potentially changing the balance between buyers and sellers.
Changes in demand might impact negotiations, although updated data on the percentage of properties sold below the original asking price might vary compared to the figures from November 2022, where 72% sold under asking.
Market fluctuations and regional variations can led to a different situations, possibly affecting the bargaining between buyers and sellers.
Be prepared for higher moving costs
Moving up the property ladder often comes with additional costs, such as stamp duty, estate agent fees, and conveyancing fees. The average cost of moving home is £11,777 in 2023, although it can be far less or much more depending on where you live
Take advantage of negotiating power
According to Zoopla the sellers are now accepting offers 4% below asking price on average, which works out to a £10,500 discount on the average home 2023.
However, essential thing to note while these statistics suggested increased negotiation potential for buyers, individual circumstances and regional market variations greatly influenced the extent of negotiation leverage
Conclusion
However, making the decision to move must involve a comprehensive evaluation of personal circumstances, financial readiness, and long-term goals.
Factors like job stability, family needs, location preferences, and the ability to cover moving costs significantly impact the feasibility of a move in 2024.
For those aiming to buy, the potential for increased negotiation leverage might arise from market conditions, presenting prospects for securing favourable deals.
