For first time buyers, now is a challenging time to get on the UK property ladder. Latest figures published in April show that average property prices hit a record high of £254,606 in March.[1] In the year proceeding February 2021, prices rose by 6.9%.[2]

The housing market is booming, spurred in part by lockdown and government intervention. 

The Chancellor of the Exchequer announced in his March budget an extension of the stamp duty holiday until the 30th June for England and Northern Ireland, which will transition out between 1st July and 30th September.[3] A new scheme to help first time buyers secure guaranteed 95% mortgages is also on the horizon.

What is the future for house prices for those looking to get on the UK property ladder?

Property price rises are great news for existing homeowners, but they do mean more expense for those looking to buy.

The sharp rise in house prices was not expected. Forecasts for 2020 had predicted that prices would fall. However, with the extension of the furlough scheme and the tax incentives announced by the government, it is likely that prices will continue to rise, at least in the short term. 

The longer term picture is harder to predict. When the furlough scheme ends, economists are anticipating increased difficulties for the economy, and this would likely affect house prices negatively. New buyers should be aware of this possibility. Those overstretching to buy a property which they need to sell quickly if they experience an unforeseen drop in income will suffer if prices do fall.

Should I buy now?

Spring is traditionally the season when many new homes come on the market as people are keen to sell before a lull during August. 

House prices and the housing market vary a great deal across the UK. Whether or not it is a good time to buy is dependent on your circumstances. Many lenders have tightened their criteria recently. One side effect is that it has become more difficult to find a mortgage with a low deposit.

However, if you have enough capital for a deposit, particularly that magic 10% or more figure, it could be worth taking the plunge. It’s worth talking to a financial adviser to discuss your options and see what mortgages are available.


[1] Average price of UK home jumps to record high of £254,606 in March | Housing market | The Guardian

[2] Annual UK house prices up 6.9% in February in ‘surprise’ increase | Evening Standard

[3] Budget 2021: stamp duty holiday and 95% mortgages – Which? News