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First Time House Buyer; House Buying; Why Buy Now?

Updated on January 24, 2012

House buying is a daunting process for the first time house buyer in any economic climate.  So, why buy now?  This article will give you lots of reasons why now it is as good a time as any to buy your first home.  Buying a home always has its pro’s and con’s.  However, it is always about your attitude and what you prioritise as important. 

The house buying market today has slowed and interest rates are at their all time low. Now is the time to purchase that house that you have been waiting for. In any condition, where there is a housing bust, there is a time when it has reached its lowest. This condition has arrived and it could be the start of bounce back. It is now that the time is ripe to buy those bargains whilst you can. This is especially the case for a first time house buyer. This article will give you some very good reasons why you should purchase your first home.

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More resources to help you buy your own home!

Buy Your House Now

Property prices in the UK have, on average, doubled every seven years. This has always been the case – even during the 1930’s depression. It seems that whatever there is a ‘financial crisis’ there is always a recovery. This is the natural order of life – a time for growth – a time of stagnation, followed by another time of growth. Nature is cyclic and so is the economy. Great news for the first time house buyer!

Housing Market Dip

The housing market has bottomed out. This means that growth is just around the corner. The banks are reluctant to lend. This stagnates the housing market further – not because there isn’t a demand, but because the money is being held back. This situation with the banks will not go on forever.

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Example of Sheep Syndrome

The Daily Mirror Newspapers used to give money advice on shares a few years ago. A share would be tipped as a good buy and those millions who read the Mirror would go out and buy them. The share price then increased because the more who bought the share the higher the demand, therefore, the greater the price. This is what I term sheep syndrome. It is about following the herd.

Bank Lending Is Not To Do With Social Conscience

The money that banks loan aren’t lent because they have a social conscience. They lend because they want a good return over a very long period of time with the minimal of investment. This money comes from you. If you have a good credit rating and can prove that you are a good risk, there is no reason why they shouldn’t lend to you! House buying will be made simple for you.

Most people have been scare mongered into thinking that purchasing a home could be risky. They are finding it difficult to raise the large deposits required by banks and fear that their investment may reduce in value at this time. But it is because the popular view in not investing in a home is precisely one of the main reasons why property prices are at their lowest. It is for this reason you should act now before the ‘sheep syndrome’ starts again.

What is this sheep syndrome? This is when people follow and act on the advice and actions of the majority (following the herd!). If people are told it is not the time to buy, people get scared and don’t – they wait for when the ‘experts’ tell them when to and, hence, this increases the investment price! Why? Because demand outstrips supply!

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Invest In House Buying Before The Next Bout Of Growth

People are scared because of the present economic climate. But you don’t have to be. If you have the deposit and the right attitude, you can invest in a home before the next bout of growth. Think of your home as, not only an investment, but also a roof over your head – somewhere to live… somewhere to call your own. This should be the main consideration to the first time house buyer.

It is all about swings and roundabouts. What do I mean about this? Well, interest rates are low and house prices have dropped. However, house buying deposits are high and banks are requiring large additional payments to set up mortgage accounts.

What would be the alternative in a time of a more inflated housing market? Well, this would mean higher interest rates and higher house buying cost. So, where you lose - you gain and when you gain - you lose.

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Despite Administration Charges & High Deposits, Now Is The Time To Get A Mortgage and Buy!

Now is a time when it really is worth the high deposit charge and administration charges for setting up mortgages. Why? Because house prices have bottomed out so much that when the upturn starts, I believe, you will gain back the charge in the growth of your house greater than the upfront fees.

I spoke about high house buying deposits. This could be 10 – 25% of the purchase price. However, going back before ‘Self Certification’ mortgages – where you didn’t have to prove income and was just based on a promise with up to 110% mortgages – 10 - 25% deposits were the norm. You are, therefore, not being hard done by – this is just going back to mortgage normality! A first time house buyer needs to keep this in mind.

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If You Are Considering A Mortgage - Do It!

My advice to people who are considering taking out a mortgage – do it! Now is the time to take the plunge. Don’t fear what you can’t guarantee because life holds no guarantees and if your home is your priority, you will succeed in fulfilling your dreams. It is all about attitude to money and lifestyle.

I want to add that since my first mortgage, the loan grew as I climbed the property ladder. Over the years, my loan went from £26,500 to £150,000 on an interest only basis. I purchased further endowments to top up.

This would not be what financial advisors would recommend today, but it seems to have worked for me. I am still covered on life insurance and will eventually enjoy a series of payouts over the coming years.

Yes, I know there will be a shortfall – and I could have had a better return investing in less risky investments, but that is the risk you take when you invest in unit trusts!

A Mortgage Is About Attitude To Money and Lifestyle

When I first started out – before the days of self-certification mortgages – I had to find a huge deposit for a mortgage. My first house cost £38,000 and it was a fight to get a mortgage of £26,500 (approx 30% deposit down). Everything is relative and wages were a lot lower in those days (I am talking 18 years ago). I was earning about £6,500 a year and was nursing in a learning disability hospital for the NHS.

In order for me to get my loan, I had no choice but to get a low cost endowment (linked to unit trusts and with in-built costly life insurance) on an interest only basis. Yes, I was one of those people who were miss-sold endowment policies, but if I wanted a mortgage loan, I was told that the application would be rejected without the endowment policy. I didn’t really have a choice if I wanted the opportunity to own my own home.

My priority was to pay my mortgage. I turned the interest only component to my advantage and lived on second hand items for years. This enabled me to repay a little more above and beyond the interest only component of the loan whenever I could – slowly chipping away at the loan. As I said previously, it is all about attitude to money and lifestyle. I hope my example shows that my lifestyle choices have been contributory to becoming mortgage free today!

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How Are Things Different Today For The First Time House Buyer?

So, how are things different today for the first time house buyer?

  • You are now told about the risks associated with endowments.
  • Interest only mortgages are more frowned upon.
  • House prices are higher (but then, so are wages).
  • Percentage deposit requirements and scrutiny is less – despite the downturn in the economy.
  • Buy to let mortgages are still available, whereas they were virtually non-existent.
  • You are more likely to be offered mortgage products that stipulate upfront fees.
  • You are still required to pay solicitors, surveyors and registration fees.
  • Interest rates are at their lowest now whereas then, they were at, one point, their highest (15% - Black Wednesday)

So, on balance, mortgages are just as hard to arrange and pay today as they were then. It has always been difficult for the first time house buyer!

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Buy Your House Now Before Everyone Does!

Now that house prices have bottomed out, now is the time to buy. The purchase of your new home will provide security for you and your family for years to come. This is true for the first time house buyer as anyone else. If you haven’t purchased a home before, this commitment can be particularly daunting. However house buying is about attitude, lifestyle and priorities. Buy your own home now before everyone jumps on the bandwagon.

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Home Is Where The Heart Is - The First Time Buyer Now Has A Choice!

This article was designed in order to give the first time house buyer and informed choice.  Today, there is much uncertainty to the economy, especially the house buying market.  So, why buy now?  For the simple reason that you house is your home.  It provides security and an investment.  If you prioritise your lifestyle choices, there is no reason why you shouldn't have a decent roof over your head for years to come.  It is a place for family and home is always where the heart is!

© This work is covered under Creative Commons License

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Use this article at your own risk. This article does not give financial or mortgage advice, neither does it give legal opinions.  Any action or outcome that may result from this article is the sole responsibility of the reader.  This and all my articles assumes no responsibility or legal claim against them.


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    • shazwellyn profile imageAUTHOR


      10 years ago from Great Britain

      Anthony - glad you agree.

    • profile image

      Anthony Rueda 

      10 years ago

      I completely agree with your post, now is a perfect time to buy. Great rates, good prices, in 5 years a lot of people will be saying, "I wish I bought property in 2010".

    • shazwellyn profile imageAUTHOR


      10 years ago from Great Britain

      I am DB Cooper - I am glad you can see it too! This is typical of the cycle in terms of house investment that we see over the generations. House buying is always a win investment - much better than anything else! Bricks and molter - people always need a roof over their heads!

      Thank you for your contribution:)

    • I am DB Cooper profile image

      I am DB Cooper 

      10 years ago from Whereabouts unknown at this time

      It sounds cliche, but there's never been a better time to buy a house. Prices are at rock bottom and really can't go much lower in most places. Property can only go so low, because they aren't making it anymore. Great hub.

    • shazwellyn profile imageAUTHOR


      10 years ago from Great Britain

      idreesfarooq - thanks.. grab your bargains whist you can!

    • idreesfarooq profile image


      10 years ago from fiverr dot com/idreesfarooq

      Great information. I am agree with you about thinking of buying a house right now. You provide very focussed information. Thanks a lot for sharing of useful thoughts!

      voted up!-


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