How will the change in Government affect the housing market?
With a new Government now in office, buyers and homeowners will be wondering how it will affect the housing market. Data analysts suggest housing market trends aren’t traditionally impacted around the time of a general election but there may be a post-election bounce.
It’s likely to be some weeks before the new Government announces its budget and then gradually begins introducing its manifesto pledges.
Prior to the election, Labour revealed plans to introduce a Freedom to Buy Sscheme, to provide a permanent mortgage guarantee to help people who struggle to save a large deposit.
Under the new Labour Government there’s also set to be an overhaul of the planning system, which will help to boost the supply of new homes.
2024 mortgage rates
Experts are predicting a more stable future regarding mortgage rates and while its difficult to predict when the base rate, set by the Bank of England, may decrease, experts agree that with lower inflation, this is likely to be on the horizon.
“It’s a good time to buy a house because interest rates are stabilising and lenders are competing on rates because they all still want to lend,” said Andy Mannion, from RSC New Homes.
“The mortgage market is more competitive than we have seen in the last three or four years. We’ve seen an increase in higher loan to value mortgages being more readily available recently. In fact, there’s a record number of lenders offering 95% mortgages on new build homes.”
Deposit Unlock offers the chance to purchase a home with a 5% deposit and 95% mortgage. It’s exclusive to new builds priced up to £750,000 and is available to first time buyers and existing homeowners. We guarantee part of your mortgage so you can access more competitive interest rates.
Andy explained that current mortgage rates are based on expectations in changes to the base rate longer term.
“The expectation now is that we will see base rate reductions and it would appear that rates have topped out. We anticipate mortgage rates will go in a downward trend. Lower rates tend to mean lower monthly repayments, which could increase the options available to buyers.”
Read our guide for more advice on what you need to know about mortgages.
House prices in 2024
There are lots of different sources of data on house prices. The UK House Price Index is based on completed sales from Land Registry figures. Lenders including Halifax and Nationwide have their own indices, based on their mortgage approvals.
Supply and demand will impact house prices, but it’s important to work out your budget and how much you can afford to pay when all things are considered.
Homeowners may be tempted to wait to see if house prices increase or decrease when deciding whether to sell or buy. While an increase could mean they’re able to make a profit on their current investment, it also means they will pay more for their new home. Either way, delaying could mean they miss out on their preferred new home in the meantime. The good news is that we can offer tailored moving support including Help to Sell or Part Exchange.
Why do up when you can buy a new?
Comparing house prices is tricky as no two homes are exactly the same. When comparing new build house prices to older property, it’s important to factor in the condition, along with the size, location, and running costs.
Research by the Home Builders Federation suggests it would cost more than £70,000 to bring a three-bedroom semi-detached home to the same standard as a new build. Instead of having to budget for expensive repairs and renovations and then trying to live around the works, subject to build stage, our homeowners can enjoy the fun of making their home their own before it’s built. We’ve launched a kitchen visualiser tool, available in our customer experience suites, to help buyers personalise and design their new kitchen from scratch.
The My Redrow area of our website can also be used to explore other options and upgrades available for your new home including adding flooring, fitted wardrobes or adding turf to the garden. Learn more about what’s included in a new build house.
Energy bills in a new home
Our Eco Now Homes and our “zero carbon ready” Eco Electric Homes are among the most energy efficient available, helping you save money while helping the environment. In fact, our latest homes have the potential to save you £2,575** a year on your energy bills when compared with an older property.
Our Eco Electric Homes are completely gas-free and use air source heat pumps to provide heating and hot water in place of a traditional gas boiler. Under floor heating is included as standard to the ground floor in our Eco Electric homes
What is a green mortgage?
Our new homes achieve a minimum Energy Performance Certificate of B, making them eligible to be purchased with “green mortgages”. As the EPC is only produced once a home is built, most lenders accept a Predicted Energy Assessment (PEA). This increases to an A rating if customers take advantage of the option to add solar panels via My Redrow.
“Buy your home with a green mortgage and you could access low mortgage rates when compared with other mortgage products or the lender may offer you cash back,” Andy explained.
“In some cases, the lender may take into account that you’ll be paying less on energy bills in a new home and offer enhanced affordability. Essentially, the money you’d save on energy can then be used towards your mortgage repayments.”
Is this a good time for first time buyers?
If you’re keen to make that crucial initial step onto the housing ladder, you’ll be wondering is this a good time for first time buyers.
“The range of 95% mortgages available provides a route to homeownership for first time buyers,” Andy added. “There are also mortgage deals for first time buyers and mortgage products that allow family members’ savings to be offset against the loan until a certain amount has been repaid. Everyone’s financial situation is different and it’s important to take advice from experts before making a decision.”
A gap between supply and demand is pushing up rent. Choose to buy your own home and you’ll have greater security as you won’t have to worry about the landlord increasing your rent or selling up. You’ll be investing in your future rather than paying someone else’s mortgage. Plus, you’ll have greater freedom to make your home your own, right from the start.
Stamp Duty is a tax linked to property prices. First time buyers in England are exempt from paying Stamp Duty on homes priced under £425,000 until April 2025. In Wales, Land Transaction Tax is payable on homes priced over £225,000 with no relief for first time buyers.
First time buyers with a household income of up to £80,000 could use First Homes at a discounted price on certain plots on selected developments.
Saving for a deposit can be tricky and many first time buyers receive financial support from “the bank of mum and dad” or other relatives. If you’re receiving help with your deposit, we’ll contribute too with our gifted deposit match.
Help to Buy Wales is available until March 2025 and is exclusive to new builds priced up to £300,000, making it a great option for first time buyers. Buy a new home in this way and you’ll typically only need a 5% deposit and 75% mortgage. The remaining 20% is covered by an equity loan, which is interest free for five years.
Find out more about the first class help for first time buyers.
If you’re ready to move, make sure you read our guide to 10 things you need to know when buying a new home.
* HBF - Get on with living.
