What are the best home buying tips? Mortgages and house prices explained by expert amid cost of living crisis

With interest rates set to rise and figures showing more people are struggling to pay rent, here’s the current best advice from the HomeOwners Alliance

Many people up and down the UK are facing great uncertainty as a result of the worst cost of living crisis in decades.

As well as soaring inflation in consumer prices - a problem that’s causing some people to struggle to keep up with their rent - homeowners might face an increase in their mortgage repayments as the Bank of England looks likely to raise interest rates in early May.

With house prices also continuing to rocket, now might not seem like the best time to get on the housing ladder.

So what is the best advice at the moment for prospective home buyers?

To buy or not to buy: should you take the plunge if you want to buy a home? (image: Getty Images)

NationalWorld spoke to Paula Higgins - CEO of consumer group HomeOwners Alliance - to hear what the best advice currently is.

With house prices rising, is now a good time to get on the housing ladder?

House prices are constantly increasing but we think it’s going to slow down.

Our index of home price indices (including those from Nationwide and Halifax) shows there’s been 14.4% growth in detached house prices over the last year but the figure is 8.1% for flats and maisonettes.

The rise has been down to people moving out of cities, as well as pent up demand and a lack of supply.

A lack of supply of new homes is driving up house prices (image: AFP/Getty Images)

But business people are being forced to go back into work and are commuting again, which might force more people to move back into cities.

And while it’s a seller’s market, I think things will slow down as the cost of living crisis bites - for example, there’s a lot of uncertainty over things like wages and energy costs.

If you’re a first time buyer, the way to look at it is that rents are also going up.

And while inflation is tough, it will erode the amount you’re borrowing so long as your wages are keeping up.

So, if you can move now - do it.

HomeOwners Alliance CEO Paula Higgins says you should get on the housing ladder if you can afford to do it (image: Getty Images)

As interest rates are rising, should you go for a fixed rate mortgage?

Interest rates look scary but they shouldn’t put you off getting a two, three or five year fixed rate.

Remember inflation is on your side - it erodes what you borrow.

People have been moving out of cities during the Covid pandemic (image: AFP/Getty Images)

10-year fixed rates are now available from some lenders but are for the ultra cautious.

If you’re likely to be moving again in the not too distant future, you’ve got to think about how long you fix for.

We’re also seeing a lot of people remortgaging.

Our advice is don’t stay on a variable rate mortgage.

If you’re coming to the end of a fixed rate mortgage deal, go for a fixed rate again.

Given what’s happening with the world - for example, the cost of living crisis, Ukraine, etc. - it’s worth going fixed because then you know exactly what your outgoings will be.

Interest rates are also still pretty low (compared to historically).

What happens if you’re struggling to make mortgage repayments?

The first thing to note is that if you can scrape a deposit together, you’re likely to be secure.

Also, banks do stringent affordability checks when you take out am mortgage and will not want to repossess your home.

Mortgage payers could soon have to pay more if interest rates rise (image: AFP/Getty Images)

If you do run into trouble, talk to your lender and see what you can do.

It might also be worth taking out property insurance if you’re worried about losing your job.

What are your home buying top tips?

It’s a tricky time to buy, so do your research - know what estate agents can and can’t do.

Remember they work for the seller so they don’t always necessarily give out the best advice.

But you want to be their best friend.

I’d also recommend being flexible and proactive.

For example, get your forms done one time as the slower you are, the more chance it has to fall through.

Finally, think long term.

It’s worth remembering houses are for living in and are the largest investment of your life - if it’s your first house, don’t necessarily look for a quick buck straight away.

For more advice on buying a home, visit the HomeOwner’s Alliance website.