In what will come as welcome news to potential buyers, UK housing prices are predicted to continue falling into 2024 and won’t recover until 2025. Property prices are forecast to fall 11% from their peak last year by the new report from Lloyd’s bank, giving those looking to make their first steps on to the property ladder some much needed relief. December 2021 marked the first of 14 consecutive house price rises, essentially locking many buyers out of the housing market completely, and this fall in housing prices is the perfect window to take advantage of for first time buyers. 

We have advice from David Hannah, property expert and Group Chairman of the UK’s leading property tax experts, Cornerstone Tax, on how first-time buyers can look to make the most of the dip in the UK’s housing prices.

Key tips for first time Buyers:

1 Location and Property type

Assess different areas and types of properties to identify if they are more resilient or may recover quickly:

Make sure to assess the area you’re looking at, and whether it’s expected to appreciate or depreciate in the future and take the long term into account when looking at the resilience of different area’s when looking for a home.

2 Price Negotiation:

Buyers have more ability to negotiate in an unstable market, and you can use this to your advantage to get yourself the best deal possible. Getting pre-approved for a mortgage will signal to sellers you are a serious buyer and help lend you leverage when negotiating a price.

3 Renting v Buying 

Make sure to weigh up your options between moving for a full purchase or renting a property and remember to take both short- and long-term costs into account. Remember to also consider whether flexibility or stability is more of a priority.

4 Seek professional advice! 

Almost half of first-time buyers (47%) regretted the speed or level of their offer, according to government reports. Having professional advice on how best to navigate purchasing your first home is critical and can help prevent you making any rash decisions and looking back with regrets in the future.

5 Government initiatives

Keep an eye on government incentives for first-time buyers and be open to outreach programs from banks such as Lloyds, who offers debt advice and potentially better rates. Potential new measures include an extension of the mortgage guarantee scheme for an additional year which allows people to take out a mortgage with just 5% of their deposit, reduction of stamp duty and the introduction of new ISA products to encourage first-time buyers to save for a deposit.

David Hannah, Group Chairman of Cornerstone Tax, comments: “First-time buyers have spent the past two years anxiously waiting as mortgage rates continue to surge at exponential rates. Now with news that house prices are set to fall into 2025, navigating the property market requires a different approach. Ensuring you have all your ducks in a row by speaking to the right people, doing the research, and looking for schemes that can financially assist you has never been more important, particularly given that the current economic climate has already stung so many British households.

“I think that one of the key considerations first-time buyers should keep in mind is to embrace a long-term perspective when making a decision. Exploring different neighbourhoods and types of properties, for instance, can give you a better idea of the area’s resilience and potential recovery. Make sure that you have a comprehensive understanding of the market dynamics and have a clear goal of your lifestyle needs, so that you’re in a favourable position when negotiating and can make a well-informed decision to avoid any regret after the sale.”