Homebuyers delaying purchases in hopes of better mortgage deals could end up losing thousands of pounds by the end of the year, research by Alexander Hall found.
The anticipated rise in house prices, alongside increased Stamp Duty and mortgage deposits, is expected to outweigh the potential savings on monthly mortgage payments.
The upcoming SDLT changes has created urgency for buyers nearing completion, while others may wait for improved mortgage rates as interest rates are expected to drop later in the year.
However, analysis from Alexander Hall suggested that waiting for improved mortgage rates could cost buyers more.
Mortgage rates were expected to fall from 4.27% to 3.63% by year-end, saving buyers £37 a month or £900 over a 2-year fixed term.
Meanwhile, average house values could rise by 3.5% to £277,470, increasing the cost of a mortgage deposit by £1,877 and Stamp Duty by £469.
Waiting might cost buyers £2,346 more in upfront costs, negating the £900 mortgage savings.
Stephanie Daley, director of partnerships at Alexander Hall, said: “Whilst we’re still a few weeks away from the stamp duty deadline, the reality is that unless you’re nearing the end of your purchase, you’re unlikely to complete before 1st April and this means you’ll need to pay a higher rate of stamp duty.
“It’s a considerable jump, with the average homebuyer in England set to pay £2,500 more, and so it’s understandable that with interest rates expected to fall further this year, some buyers may choose to sit tight in anticipation of improving mortgage affordability.”
Daley added: “However, doing so could well cost you more, as 2025 is forecasted to be a far more buoyant year for the housing market.
“With house prices likely to climb, you may well find that choosing to wait it out could see you pay more for both a mortgage deposit and in stamp duty, versus the savings you’re set to make on your mortgage repayments.
“The good news is that many lenders are already reducing their rates due to the greater degree of market positivity that has materialised so far this year and, by acting now, you can not only secure a more favourable rate, but you can also avoid any future increases to purchasing related costs.”
