House prices may have shown signs of moderating in recent months, but the question is, where do see them in a year's time? Halifax has looked into this very question, and most people seem to think there's still only one way for them to go – up.
The latest Halifax Housing Market Confidence Tracker shows that 68% of respondents expect average property prices to be higher in 12 months' time, with just 5% expecting them to be lower. This is perhaps unsurprising considering the fact that annual house price inflation is currently running at 9% (with the average house price at £204,674), while concerns of a rise to base rate in the year ahead seem to have had little impact on house price optimism.
However, thought of a rise to base rate is impacting one area – expectations regarding interest rates. Happily, 35% expect savings rates to be higher in a year's time (up from 26% at the time of the last survey), but at the other end of the scale, 58% now believe that mortgage rates will be also higher (up from 48% previously). They could be on the right lines: our own research shows that mortgage rates are already beginning to edge up, which means anyone wanting to secure a low rate would be wise to act sooner rather than later.
Thinking of moving up the ladder, or want to remortgage to get a lower rate? Then it's time to take action! Remortgagors in particular will be able to benefit from rising house prices, as they may be able to use that extra equity to move down to a lower loan-to-value – and in doing so, they'll be able to get cheaper rates.
Second-steppers will be able to benefit from lower rates, too, with competition ensuring that there are still some great mortgage deals to be found. Of course, some people will still find it a challenge, particularly those who are yet to take the first step – the Halifax survey found that being able to raise a deposit is still the biggest barrier to homeownership, and its impact is growing. In fact, 57% of respondents now cite it as a key barrier, up from 55% at the last survey, no doubt fuelled by ever-rising house prices.
However, don't let that put you off. Start by saving religiously and make cutbacks wherever you can to boost your pot, but your choice of mortgage could make a lot of difference, too. If you opt for a mortgage that requires a 5% deposit (Help to Buy or otherwise), you may find that your savings goal is lower than you initially thought, which could make it a whole lot easier to achieve.
No matter what stage of property buying you're at or what you think will happen to house prices, there's never been a better time to make your move. So, check out our best buys to find the deal that could be right for you.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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