From changes to Stamp Duty to interest rate cuts, the UK housing market has been affected by various factors in recent times. If you are wondering whether it is the right time to buy your first home, then it's worth getting advice to check your options.
Over the past few years, the cost of buying a home has increased significantly. The current average house price in the UK is £268,000 (Zoopla). According to Barclays, first-time buyers are still struggling to save for a deposit, despite lower utility costs in recent months.
Around 37% of renters report that their main barrier to buying their first home is the amount needed for a deposit. However, there are options available such as 100% mortgage loans that could offer a solution for some first-time buyers.
If you are looking to get a mortgage for the first time, then it is worth understanding how mortgage rates are impacted by interest rates. The Bank of England sets a base rate, which has recently been cut from 4.5% to 4.25%. However, mortgage lenders have their own interest rates, which are usually higher. This is the amount that you will pay in interest when you borrow money through a mortgage to buy your home.
As the Bank of England base rate influences mortgage interest rates, mortgage payments can go up or down. Standard variable rate and tracker mortgages are affected by changes to interest rates. Fixed-rate mortgages won't change over the agreed term, which is usually two or five years. But you could be moved to your lender's standard variable rate at the end of a fixed term. It's important to understand the key differences between each type of mortgage.
The recent changes to Stamp Duty are another factor currently affecting first-time buyers. In April 2025, the nil-rate threshold for Stamp Duty tax relief for first-time buyers reduced from £425,000 to £300,000 and to £125,000 for homeowners. If you are looking to buy your first home, you will need to pay Stamp Duty on properties valued over £300,000.
Example: if you were to buy a home valued at £350,000, the Stamp Duty would cost £2,500.
If you're a first-time buyer, you may be wondering if it's the right time to buy. You might not know whether a standard variable rate, tracker or fixed-rate mortgage is the right solution for your situation. Lenders will also look at various factors before they offer you a mortgage deal, including your credit history, size of deposit, and whether you have enough income.
If you are looking to buy your first home, I'm here to help first-time buyers realise their property dreams. With access to over 90 lenders, I can research the market to find the right mortgage for your needs. I'll explain your options and guide you through the whole process.
Looking to buy your first home and need mortgage advice? Book a call today
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
https://www.zoopla.co.uk/discover/property-news/house-price-index/
https://www.propertymark.co.uk/resource/100-mortgage-product-to-help-renters-with-no-deposit
https://www.moneyhelper.org.uk/en/blog/buy-or-rent-a-home/how-will-interest-rates-affect-my-mortgage
https://www.moneyhelper.org.uk/en/homes/buying-a-home/stamp-duty-calculator