When you are still studying at university, the idea of buying a house might seem like light years away but those who manage to get on the property ladder early on will generally be in a much better long-term financial position. There are many benefits to buying property sooner rather than later, and we take a look at them below.
Take advantage of low mortgage rates
Right now, the Bank of England rate is at just 0.1%, meaning that the current mortgage market has some very good deals with low interest rates. Buying a property now and tying into a fixed term with a low-interest rate makes good financial sense, as the rate could be significantly higher in five or ten years' time. However, it is a good idea to get advice before jumping into the commitment of a mortgage. Trussle can provide mortgage advice and remortgaging services in the future, to help you to take advantage of the competitive mortgage rates available. Using an online service like this gives you quick access to experts and their advice, while also proving convenient as you can tap into their services from your own sofa.
Property prices are due to fall
Property experts are predicting that average house prices will fall by around 13% in 2020, meaning that home buyers will be able to get a property at a significantly reduced price compared to previous years. So, for those wondering whether to rent or to buy, this year and probably the next few years will give you more for your money. Once you start in your first job, it is worth keeping an eye on the property prices to see if you can find your bargain home before property values start to rise again.
Rent is dead money
When you are renting, that rent payment is generally just putting money in the landlord's pocket or paying off their mortgage for them, instead of your money going towards your own financial future. With low interest rates, if you buy a house then you may find that your mortgage payments each month are lower than what you would pay in rent for a similar property. It also means that you have control of whether you move, rather than facing the situation of a landlord deciding to sell their property and not renew your tenancy.
Benefit from house value increases
Although property values can drop, over a period of 25 years they are most likely to increase overall. Also, if you buy property whilst the market prices are lower, you stand to gain value in your house as the market recovers. Buying a property whilst in your 20s means that you will have equity in your property by your 30s and 40s, should you need to use it.
Pay off your mortgage early
The earlier you start paying off your mortgage, the earlier you will pay it off in full. You could be mortgage-free by your 50s and have your property as a nest egg for your retirement. This could even mean that you are able to retire earlier than you would have if you had waited to buy the property later on in life.
So, although it may seem a crazy idea, working your way to the property ladder. These are just a few of the reasons that you should be looking to get a deposit together and get on that property ladder as soon as you can.
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