Today, it has been announced that the average UK house price has increased by 13.2% over the year to June 2021, up from 9.8% in May 2021 – the highest annual growth rate the UK has seen since November 2004.
According to recent ONS data, UK average house prices reached a record high of £266,000 in June 2021, some £31,000 higher than this time last year.
This hike is certainly alarming news for prospective home buyers. According to top personal finance experts at money.co.uk, now is a crucial time for people to increase their financial preparations towards securing a home.
James Andrews, senior personal finance expert at money.co.uk said: “House prices are rising and potential buyers will need to do some serious financial preparation if they intend to secure their dream home in the near future.
“Budgeting wisely is key to this. Making a list of all your regular outgoings will help you find areas to cut back so you can save more money for your deposit. A quick way of cutting back is to find better deals with your day-to-day providers to help cut costs across monthly bills.
“It’s also crucial you put your saved money into a separate account, just to keep track of how much you’re saving and also to avoid unnecessary spending. The good news is that by using the right account – a Lifetime ISA for example – you can get a cash boost tof up to £1,000 a year to help you save faster.
“If you’re currently renting, consider finding a cheaper room temporarily or return home to live with your family if you can. Doing this for a period of 6-12 months can really boost the rate you’re able to save.
“It’s also important to remember that you’re not alone when it comes to saving up for a home. As well as Lifetime ISAs, there are schemes like Right to Buy and first-time buyer mortgages, there are a number of Government schemes that can help you get onto the property ladder faster.
“Before you decide on what kind of property you’re interested in, check which schemes you’re eligible for as this may limit your options. For example, with the Government’s help to buy scheme, you’ll only be able to access the loan if you’re buying a new-build home or flat.
“The rise in house prices also means it’s now more important than ever for prospective buyers to secure the best mortgage deal.
“It’s vital that you compare deals, and make sure to pay attention to the small print so you’re aware of any fees or potential increases of interest.
“It’s important to understand how different sorts of mortgages work – for example, with a fixed-rate mortgage, your interest rate stays the same for a set period of time but you can be charged a fee if you want to move sooner than that. You’ll also likely see your interest rate surge at the end of the fixed period. With a variable rate mortgage however, your mortgage repayments could go up or down based on underlying interest rate changes, but you might have the freedom to move when you like – or potentially to just stick with your current deal until you’ve cleared your mortgage in full.
“To compare the best mortgage deals out there and find out which package is right for you, visit: https://www.money.co.uk/mortgages.htm”.