Is Now A Good Time To Buy A House In The UK?

is now a good time to buy a house in the UK

Navigating the volatile UK housing market can be daunting. Should you take advantage of a slight dip in prices, buy a house now and take the high mortgage rates on the chin, or should you play it safe and wait a while before investing? In this article titled “Is Now A Good Time To Buy A House In The UK?” we take a look at current trends in the UK housing market, the pros and cons of buying a house in 2023, and what the experts have to say about buying a house right now.

Current Market Trends

Nationwide’s latest statistics show house prices took a bit of a tumble in the past year, shrinking by 5.3% up to August. That’s the most significant drop we’ve seen since 2009. Meanwhile, Zoopla’s expectations are not overly optimistic either, predicting that prices might slide another 5% in 2023. Halifax also says house prices have gone down, but only by about £1,000 on average, which is a 0.3% drop. The Office for National Statistics tells a similar story, recording a similar 0.3% decline in February. This could be due to fewer people hunting for homes, perhaps because of the current cost of living crisis and higher interest rates. 


With the Bank of England cranking up interest rates, the average two-year mortgage rate just hit over 6%. If you do the maths, it means someone looking for a £200,000 mortgage could end up shelling out £300 more every month compared to last year. But it’s not all bad news for prospective buyers. Those just stepping onto the property ladder might not need as large a deposit as during the pandemic times.

House for sale in the UK

Pros of Buying Now

Some areas becoming more profitable

Investing in property in certain areas could prove very lucrative – Northern cities like Liverpool, Leeds and Manchester have been enjoying a lot of local investment in regeneration projects, making them desirable places to live. Buying now while prices are relatively low could prove a wise investment. Savills predicts house prices in the North West, North East and Yorkshire & The Humber areas will rise by an impressive 11.5% by 2027. 


Play the long game

If you’re thinking of buying a house and you’re sure you can handle the monthly mortgage payments, then going ahead now could be a smart move. This is particularly true if you’re planning to make that place your long-term home, rather than just an investment opportunity.


However, if you’re looking at it purely as an investment, keep in mind that the value of that home might dip for a while before it starts climbing again. So, you’ll need a bit of patience and maybe some nerves of steel. Now, if you’re thinking of playing the waiting game, there’s a flip side. Waiting might mean you end up with a longer mortgage term to keep the payments doable, and that can add up in interest over time. Worst case? Prices could soar, and that dream home might just slip out of your financial reach.


First-Time Buyer Advantage in a Shifting Market

If you’re a first-time buyer, this might be a good time for you. Some sellers may be keen to seal the deal before rates hit their peak next year. And since you’re new to the game and don’t have a long chain of sales to sort out, things can move more quickly. This could give you some serious bargaining power, making now a great time to secure a good deal.

UK property investment analysis

Cons of Buying Now

Negative Equity Risk

If you’ve got a hefty deposit to put down, mortgage payments are usually a breeze. But first-time buyers often don’t have that luxury. So, say you’ve only put down a little money upfront, and then the house prices dive – boom, you’re in what’s called “negative equity”. That means your house’s value has dropped below what you still owe on your mortgage. 


Ongoing Cost Of Living Crisis 

With house prices taking a dip, you might be thinking now is the perfect time to buy. While the house might be cheaper, other costs like rising mortgage rates and skyrocketing energy bills could eat up those savings. Plus, everything else in life is getting pricier, thanks to the cost of living going up. All of this could make those mortgage repayments hard to make.


Unpredictable Volatile Market

 Buying a house when things are all over the place can be a bit like playing a game of roulette. There are plenty of experts giving their two cents on where house prices are headed, but let’s be real: no one’s got a crystal ball. You might be tempted to wait it out, hoping prices will drop to an all-time low. But who knows when (or if) that’ll happen? Before making any move, remember to consider all the risks and uncertainties.

House prices in the UK changing

Is It Worth Waiting For House Prices To Drop?

If you’re thinking of buying right now, brace yourself for the possibility of your new property’s value taking a bit of a dive. But here’s a silver lining: if you decide to play the waiting game and prices do keep falling, you might just score with needing a smaller mortgage. And the deposit amount could shrink too. So, while the idea of diving in now might be tempting, sometimes patience can pay off. Consider the above pros and cons when deciding what to do – it all depends on many factors.

UK housing investments

Considerations Before Buying

Before you even think about signing on the dotted line, you have to check in with your financial health. Are you ready for this commitment? And while you’re reflecting, think about the long haul. Do you see yourself growing old in this house, flipping it for a profit, or maybe becoming a landlord?


Diving into house hunting isn’t just about the big picture, though. You’ve got to become a bit of a detective. Research local markets, get the lowdown on the neighbourhood, and don’t be shy about asking experts for their insights. House prices can vary wildly, sometimes even within the same neighbourhood.


But it’s not all bad news. The financial forecast is looking brighter than it did a little while back. Plus, if you’re new to the property game, the government have given first-time buyers some advantages, e.g. Kwasi Kwarteng cutting the stamp duty in September’s mini-budget. Jeremy Hunt has mentioned in his Autumn Statement that this will be phased out in March 2025, so you might want to take advantage of the stamp duty holiday before then.


Here’s the bottom line: Perfect timing in the housing market? It’s a myth. Markets have their ups and downs. But if you’re thinking long-term and don’t plan to sell up in the next couple of years, those little fluctuations won’t make or break your investment. So, deep breaths and happy house hunting!

Working out if now is a good time to buy a house in the UK

Before you go …

We hope this article has helped you uncover the pros and cons and find the answer to the question – Is now a good time to buy a house?

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