Why Now Could Be the Time to Buy Your First Home?

November 29, 2024

A look at the UK and South Yorkshire Housing Market in 2024 and Beyond

After years of rising prices, the UK housing market has shown signs of slowing down in 2024. In this article, we explore why now could be a positive time to consider buying a first home. We also examine some of the property figures for South Yorkshire in 2024.

High Prices and Market Saturation  

For years, property prices have surged in the UK, leading many to fear a housing market ‘bubble’ that could burst. However, with prices having slowed down in the first half of 2024, first-time buyers and others previously priced out of the market are beginning to find affordable options.

The Effect of the October 30th Budget

The recent UK budget increased tax for second homeowners with Stamp Duty on second homes increasing from 2% to 5%. It was a more positive outlook for first-time buyers as the government plans to invest over £5bn in housing. This includes £3.1bn for affordable homes and £3bn in support and guarantees to boost housing supply and aid small housebuilders. 


Nicky Stevenson, MD at Fine & Country, stated that the budget had favoured first-time buyers, 


“Today’s budget has spared first-time buyers, however, with the government explicitly focusing on wealthier, older demographics. This approach aims to shield younger buyers and those entering the property market from further financial hurdles, especially given the persistent pressures of high housing costs and elevated mortgage rates.”

So Is It A Good Time For First-time Buyers?

According to Zoopla, it is because


"Mortgage rates have fallen by 1.2% since this time last year, saving the average first-time buyer £100-a-month in mortgage payments and £4,000 on a deposit." 


Source: Zoopla.co.uk, Sept 2024

Many first-time buyers are now spending ‘£3,400 more on their first home’ compared to previous years. Demand for homes has increased by 20%, and buyers are now seeking properties with an average value of £249,100.

Are House Prices Rising in South Yorkshire?

“The average house price in South Yorkshire is £195,000, and has declined by a modest £926 over the last 12 months.The average price of a new build is £261,000, whereas established homes are priced at £194,000.”


Source: The Property Buying Company, 2024


According to the same source, from November 2022 to November 2023, there were 12,700 reported house sales in South Yorkshire. However, this figure had fallen by 33.7% compared to the previous year.


What Will Happen to House Prices in 2025?

In 2025, house prices in Great Britain are forecast to rise by an average of 3%, marking what Hamptons calls the ‘beginning of a new property market cycle.’ Projected growth will continue moderately, with expected rises of 3.5% in 2026 and 2.5% in 2027 as affordability improves.



Reflections

In 2024, first-time buyers are benefiting from higher earnings, slower house price growth, and better mortgage rates, which have increased their buying power. 


However, affordability remains a challenge, with mortgage rates staying above 4%, leading some buyers to look for cheaper areas or smaller homes.


With the favourable budget and prices slowing down in the first part of 2024, it may well be the ideal time to get on the property ladder for first time buyers.

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