Now could be “perfect window” for first-time buyers, say experts

With landlords selling up in their droves, meaning less competition, more mortgage rates expected to start with a ‘4’ again, and buyers typically holding all the cards, experts have said now is “arguably the perfect window” for first-time buyers to get onto the ladder — before more buyers are spurred into action by reduced borrowing costs.

David Walsh, director at London-based broker Kite Mortgages, said falling borrowing costs and improved sentiment could see more buyers enter the fray, increasing competition for first-time buyers.

He said: “The UK property market is hugely sentiment-driven and, given that the narrative on interest rates has shifted fairly dramatically over the past week or so, there are likely to be more and more buyers coming back into the market.

“More buyers equals more competition, which can mean higher prices.

“With this in mind, I believe now is a good time for first-time buyers. Of course, the issue they may come up against, like all buyers, is a lack of stock.”

Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, agreed, saying rates could light a fire under demand: “The right time to buy is always different for everyone. Having said that, right now we are very much in a buyers’ market.

“With more and more rates expected to start with a 4 again, I think we will see an uptick in buyers coming to the market.

“The housing market stayed resilient when rates were previously in this bracket and I would expect this resilience to return.

“That might mean house prices start to level out and negotiating at lower prices becomes harder as there will be more competition.

“Therefore right now might be the best time to act for first-time buyers.”

Meanwhile, Lewis Shaw, founder of Shaw Financial Services, said landlords exiting en masse could also help first-time buyers, who, if prepared, could achieve significant discounts.

He added: “Now is arguably the perfect window for first-time buyers to strike a deal and jump onto the property ladder.

“Yes, mortgage rates are higher than they’ve been for a long time, but it doesn’t look like they’ll be reducing by any meaningful amount in the near future.

“Therefore, there’s no point keeping the powder dry when landlords are offloading stock at the fastest pace in over a decade.

“The power lies with first-time buyers for the first time in years, and if they’re properly prepared, there are significant discounts to be had. It’s not often I make predictions, but if buyers don’t jump at this opportunity, they may regret it.”

Meanwhile, mortgage adviser, James Bull, at Huddersfield-based JB Mortgages, highlighted that even if first-time buyers found a property now and secured a mortgage rate, they could always switch to a cheaper product if rates drop further before completion.

He added: “Now could definitely be a window of opportunity to get a good deal on a property while competition is low.

“A property purchase takes a few months to go through and lenders are allowing brokers to amend applications to the new lower rate should they drop before completion.

“So, this represents a potential win-win situation for first-time buyers.”

However, Dorian Payne, director of property developer Castell Group, warned first-time buyers against trying to time the market.

He said: “In the moving world of property, thinking about timing the market perfectly can be difficult and results in analysis paralysis.

“For first-time buyers, the key lies in taking that crucial first step onto the property ladder without overanalysing market conditions.

“History has shown that property values tend to appreciate over time and the property market, in the long run, has consistently been shown to rise.

“Therefore, for those with a stable position and a steady income, the advice is simple: don’t be overly concerned with trying to time the market.

“Instead, focus on getting your foot on that ladder.

“By taking the leap sooner rather than later, first-time buyers can position themselves to benefit from capital appreciation in the long term, even if that means a fall in capital values in the short term.”

Gareth Davies, director at Southampton-based broker South Coast Mortgage Services, suggested new-builds could be an opportunity, as many developers are offering “significant discounts” at present.

He added” “I would say now is a great time to be a first-time buyer. Yes, mortgage rates aren’t as good as in previous years, but it is most definitely a buyers’ market.

“We’ve seen new-build developers offering significant discounts on properties in recent months.

“Go back to 2021 and the asking price of a home was typically the absolute minimum that it would sell for, with many going way over this.

“Rates aren’t likely to get back to the crazy lows of recent times, so if you can get on the ladder now and make it through the next couple of years OK, you’ll be fine.”

Elliott Benson, mortgage broker at Leeds-based Sett Mortgages, was also upbeat, and pleased that the days of high octane bidding wars were receding.

He said: “Fixed rates are now reducing, the zero-deposit scheme is here and another high street lender has increased the maximum term to 40 years.

“With landlords selling, it is starting to become a favourable time to buy, especially with property offers going back to normal as opposed to £50k over the asking price.

“Instead, we are back to an actual negotiation as opposed to a mad bidding war on every single house and that will favour first-time buyers.”

Peter Stamford, director of Alston-based Moor Mortgages, was laconic: “First-time buyers should stop window shopping and make an offer. Amateur landlords are leaving the market and rates are stabilising. Buy now or forever hold your peace.”