When is the best time to buy a house or flat?

If you are wondering when to buy a house, you should know that this is perhaps the best time to do so. This is because the situation is slowly regularising, but don’t be careless, as the housing market is expected to become more expensive, which will cause prices to rise in the coming months.

When to buy a house or flat?

After the Covid-19 lockdown, the housing market has been slow to recover. This growth has been gradual and has allowed many owners to sell their properties. However, this demand for property will, in the long run, make the property market more expensive, particularly in and around large cities. Demand is expected to continue to rise in the coming years.

What buyers are looking for nowadays is spacious properties, with communal areas such as gardens or swimming pools, or at least with a terrace and balcony. In addition, flats and houses with sufficient square metres are wanted. So, is it time to buy a house?

Rising house prices

When house prices increase, different factors influence this rise. These are taken into account here:

• Mortgages. After the pandemic, banks have made it easier for their customers to get mortgages, which makes more people want to buy houses and prices are rising because of this demand. Moreover, the Euribor has also caused interest rates on variable rate mortgages to rise. Take note of which type of mortgage to choose!
• Saving. During the pandemic, it was impossible to go on holiday, for example, so many households saved. This makes it easier to buy flats, if not in large cities, then as second homes. 
• Economy. Rising house prices may feel the effects of the economy. This is due to the rising inflation in recent months in the price of basic products. So, before it continues to rise, you may want to consider buying a property this year. 

According to these figures, it is a good time to buy a house as long as you have enough savings to do so. Remember that the costs associated with the purchase not only involve the transaction itself, but you also have to cover other costs, such as notary fees and taxes. Additionally, bear in mind that banks, faced with the fall in demand for sales during Covid-19, are now offering greater benefits and bonuses on mortgages. Compare different financial institutions before deciding on one. 

Buying a house: can you afford it?

You already know, broadly speaking, how the market is doing and that forecasts estimate that demand may grow in the coming months. But now you must take personal factors into account when making a decision on whether or not to buy a house. 

Savings

The first thing to consider is if you have enough savings to buy a house. As you have already seen, buying a property does not mean simply paying the full amount of the property to the seller, but also covering costs such as title deeds and taxes, among others. In addition, mortgages do not cover 100% of the value of the property, but usually finance 80% of the value of the property in the case of permanent residences.

Please note that you will have to pay the deposit (10% of the value amount) as a reserve; and pay the remaining 10% if the bank grants you 80%. It is always advisable to have an extra 10% of the price of the property to cover other expenses. 

Type of mortgage

A large part of the population acquires their property through a bank loan. It is very important to know what kind of mortgage you can afford. Variable rate loans are very attractive because, as the Euribor goes up and down (downward trend in recent years, but slowly recovering), instalments are not as high. In other words, it seems more attractive to take out a variable mortgage than a fixed-rate mortgage. 

Note that variable mortgages can be repaid over 30 or 40 years, while fixed-rate mortgages can be repaid over 25 years, even if the repayments are higher. 

Employment status

Furthermore, for banks to grant a mortgage, they have to carry out a feasibility assessment on the individual. This allows financial institutions to determine whether or not you can afford the repayments in the long term, which is why it is important to have a steady or stable job that will allow you to afford the costs in the long run. Moreover, the Bank of Spain itself recommends that no more than 30% of income should be spent on mortgage repayments.

On the other hand, if you are looking to buy a home right now, it is worth contacting the bank where you have your salary paid. This is because banks offer many advantages and benefits to their current account customers.