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Is now the right time to become a homeowner?

After the COVID-19 pandemic ricocheted into all our lives in March, many countries went into lockdown for several months. During the summer, some began to emerge and lessen restrictions, but, as we move into winter, many economies are closing once again.

London house - Photo by David Jakab from Pexels

During the initial lockdown, it became difficult for prospective home buyers to conduct viewings, visit banks and mortgage lenders, and pursue already started deals. As such, for a while, the property market ground to an almost total halt.

However, after the initial shock to the system, things started to look up. In May, lending in the Eurozone increased, although did not top levels seen pre-pandemic. The European Central Bank then predicted that mortgage demand would increase by the third quarter. In this article, we will take a look at prices, mortgage rates, and incentives that could impact your decision of whether to buy or not.

House prices

Due to the pandemic, it's expected that house prices will drop by around 5% on average across Europe. This decline could last well into 2021 and while that is negative news for homeowners, it does provide some interesting possibilities for those looking to buy. With prices at a lower rate than they have been in previous years, there are plenty of chances to get a bargain. Another trend worth noting is that there is an increase in city properties on the market. These are also going at lower prices as people look to move to the country or less urban areas following the outbreak of the virus. For those thinking of buying, it's worth considering doing so at the moment due to lower prices - but be quick, because it may not last.

Mortgage rates

House mortgage - Image by Various - Photography on Pixabay

In June of this year, the EU adopted temporary amendments to banking rules to maximise the ability of banks to loan money to customers, including for mortgages. In the UK, mortgage rates have been rising for the last few months following a big drop in July. They remain lower than pre-pandemic, but lenders are increasing rates due to the stamp duty holiday announced in July. However, there are still some good deals to be had. The best way to avail yourself of favourable rates is by heeding good mortgage advice and researching deals via mortgage comparison sites like Trussle. Based on the size of your deposit, the term, and your income, you can see which providers are offering favourable rates and deals during this time.

Tax breaks

Back in July, the UK government announced a Stamp Duty holiday which increased the threshold of stamp duty tax to properties worth up to GBP 500,000. This means that no stamp duty is payable on transactions up to that price before the end of March next year. Essentially, those purchasing can save as much as GBP 15,000 off the final value of the sale. This drove forward a big increase in traffic to property websites, sped up closing procedures, and increased the number of mortgage applications and sales. But the clock is ticking on the stamp duty holiday so, if you want to benefit, start hunting now.

The future is somewhat uncertain, but it does seem that there are a number of incentives to buy now if you can. Lower prices, some good mortgage deals to be had, and the stamp duty holiday could all help you land your dream home.

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