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Robert Irving Burns

Buying a Home in 2021: Everything You Need To Know

July 6, 2021    |   Robert Irving Burns

Are you thinking of buying a home in 2021? If so, you’re not alone. Lockdown restrictions during the pandemic meant that many homeowners put their plan of moving up the property ladder on hold. First-time buyers also had challenges buying their first home due to employment uncertainty and fewer houses for sale. However, with the housing market opening back up, many experts think that now is the best time to buy.

Lockdowns and work-from-home orders changed the type of houses that homebuyers are searching for. Families want homes with more space and gardens after being couped up for over 16 months. Young professionals and office workers want larger apartments and houses with room for a home office.

Whatever your reasons for buying a home in 2021, our handy guide highlights everything you need to know about the housing market.

  1. Stamp duty holiday ends

The stamp duty holiday will be phased out by the end of September 2021. The tax holiday for homebuyers allowed savings of up to £15,000 of a house costing up to £500,000. This was then extended until 30 June 2021. From 1 July until 30 September, the stamp duty holiday only applies to buying a house up to £250,000. Anything over this, buyers will have to pay stamp duty at a reduced rate. From 1 October, stamp duty returns to the pre-pandemic rate.

For some buyers in the market, buying a house in 2021 could mean significant savings. The ending of the stamp duty holiday could benefit first-time buyers as they don’t pay any stamp duty on homes up to £300,000.

  1. Mortgage guarantee scheme

It is now possible to secure a mortgage with just a 5 percent down payment on a property costing up to £600,000. This scheme will help first-time buyers and homeowners wanting to move house. For example, to buy a house costing £200,000, you would only need to save £10,000 for the deposit.

  1. Mortgage rates are at an all-time low

Mortgage rates continue to be low, making a mortgage more affordable. This means that there are plenty of competitive deals for homebuyers to choose from. But, of course, the same checks apply to applicants. Additionally, the larger deposit you can afford, the better rate you can secure. So, the mortgage guarantee scheme may not be the most affordable way to buy a house in 2021.

  1. House prices may come down

Since the easing of restrictions, house prices have soared by 13 percent. This made buying a house in early 2021 relatively expensive. However, with more homes now available due to fewer restrictions and more confidence in the market, average house prices are dropping. Also, with the end of the stamp holiday duty, the high demand to buy a house may fall and result in lower house prices.

  1. Buying a house in 2021 has changed

One of the changes in buying a house due to the coronavirus pandemic is house viewing. If you are thinking of moving or buying a home, be prepared to have a virtual viewing. This service allows prospective homeowners to have a 360° virtual tour of the property.

  1. Searching for a property in 2021

During the pandemic, many homeowners and tenants revaluated their living situation. With offices and schools closed, most people spent most of their time at home working or learning. This also resulted in people staying closer to home for shopping and recreation.

In mid-2021, nearly half of property searches are for houses with gardens or nearer the countryside, the coast or parks. Also, more and more people need additional space for a home office. And proximity to local amenities is also a significant factor when buying a home.

  1. New rules on property development

You could buy a house in 2021 for a bargain price if you’re willing to purchase a doer-upper. New government rules mean that you can add two storeys to a property without going through the typical planning process. If you’re prepared to do the work, you could add significant value to a renovated property.

  1. Should you wait until 2022 to buy a house?

Several factors affect the housing market, and the right time to buy a house depends on your circumstances. These factors include trends in house prices, mortgage availability, and housing stock.

You can track average house prices at the UK Price House Index. This can help you see trends if house prices are rising or falling month by month.

Even though the end of stamp duty may mean a reduction in demand and a drop in prices, the mortgage guarantee scheme may keep prices as they are until the end of the year. Some analysts predict that house prices will fall by the end of 2021.

  1. When is the best time to buy?

Ultimately that depends on your circumstances and when you find your ideal home. Quieter times to buy are typically in the autumn or after Christmas. Summer and the end of the year are the busiest times for estate agents. So waiting until the market slows somewhat can mean you can get the best deals.

It is best to wait until your credit score is in tip-top shape and you have saved enough for a sizeable deposit. These two factors can significantly influence mortgage rates. It’s also a good idea to pay all fees associated with a mortgage upfront. This way, you can qualify for a cheaper mortgage.

  1. Other support schemes to buy a house in 2021

Apart from 95-percent mortgages, there are other schemes to help homebuyers in 2021. Here are a few options that you may qualify for:

  • Lifetime ISA—If eligible, you can save up to £4,000 a year, and the government will add a 25 percent bonus. You can use these savings to go towards buying a home up to £450,000.
  • Help to buy—If you’re a first-time buyer, you could qualify for an interest-free loan for part of the cost of purchasing a new-build home.
  • Shared ownership—You can pay 25 to 75 percent on the cost of a house and pay rent on the rest. You then have the option to buy a larger share in the future.
  • First Homes pilot—First-time buyers can buy homes discounted by up to 30 percent.


Looking to buy a property in London?

If you’re searching for your ideal home in London, the RIB residential sales team can help. We have extensive knowledge of the prime London property market and can help you find the perfect home. We cover a large area of central London including Fitzrovia, Soho, Marylebone, Covent Garden, Bloomsbury. Contact David Calderia today to find out more about our available properties for sale or browse our properties online.

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