Martin Lewis warns despite stamp duty cuts now might not be good time to buy – here’s why
Money expert Martin Lewis has warned home buyers that now might not be the best time to invest in a new home, despite the stamp duty cut.
Martin Lewis’ stamp duty warning comes in the wake of Chancellor Rishi Sunak’s stamp duty announcement last week.
‘The Chancellor made a huge housing intervention last week, scrapping stamp duty in England and Northern Ireland for properties up to £500,000,’ wrote Martin Lewis in the weekly MoneySavingExpert.com newsletter.
‘Nine in 10 purchasers won’t pay a penny, and those who do will save £15,000. Plus UK interest rates are at a 325 yr historic low, so mortgage rates are seriously cheap, meaning it’s easy to think this is the moment to buy.’
But as Martin explains, it isn’t as simple as that. The current mortgage freeze means that many first-time buyers will have to stump up much bigger deposits. On top of that, there is the looming recession and ongoing uncertainty over house prices.
‘The housing market faces a period of real uncertainty, and [the Chancellor] wants to get it moving,’ explains the savings expert. ‘The fact he feels intervention is needed raises a point of caution in itself. Plus of course, as the stamp duty rise is temporary, it could cause a demand bubble.’
‘While it’s almost certainly a good time to get a mortgage if you can, sadly only a crystal ball will tell you if it’s a good time to buy or move,’ he adds.
For many first-time buyers who have managed to save up more than a 20 per cent deposit, buying a house during the stamp duty holiday could be an opportunity to make some real savings. However, Martin does have a few words of advice.
‘Ensure the financials are sound, don’t overstretch yourself, pick a budget and stick to it (even if that dream home is just a little bit more, stick to your budget). Buy a home you’d be happy to stay in for longer, as that’s the best insurance possible,’ he advises.
Will you be taking advantage of the stamp duty cut or waiting it out for a more stable time to invest?
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