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Is now a good time to buy a house?

Posted on June 23rd 2022


Buy now, or wait? That is the question prospective homeowners are struggling to fathom in today’s hot housing market. Many ‘would be’ buyers have been leaning towards the ‘wait’ side of that equation given today’s economic climate.

House prices have gone through the roof over the last two years, with the average home costing £55,550.00 more than it did 24 months ago, but research expects prices to fall 5% over the next 2 years as the Bank of England continues to increase the base rate of interest in a bid to combat rising inflation.


So, what should I do?

First Time Buyers:

If you are a first-time buyer, you will be hoping house prices will drop, but there is no guarantee this will happen. There are also homeowners who are holding off selling due to the lack of housing supply, therefore contributing to the problem.

Mortgage rates are high and there are not really any affordable homes on the market, so it is the worst of both worlds right now for first time buyers– high house prices and high borrowing rates.

If you are looking to purchase your first home, you also need to consider the additional increases in council tax along with the ever-increasing gas and electricity prices, due to increase again in October.

The best thing to do right now would be to book an appointment with either a mortgage broker or financial advisor, who will be able to highlight the best solution for you. They may say that you are already in a fantastic position and are ready to start looking for your first home. Alternatively, they might suggest you continue to save, whether that be through a savings account, help to buy ISA or lifetime ISA and keep an eye on the market for any changes.

I am looking to sell:

It is a seller’s market! If you only have a property to sell, and do not need to purchase another property, then this is the time to sell. The market is saturated and potential buyers are snapping up properties within 24 hours of them hitting the market.

All these potential buyers and only a small number of properties means a massive increase in offers over the asking price and bidding wars. If you have additional properties, holiday lets, buy to lets or any other form of property that is not your main residence, now is the time to sell.

I am looking to sell my house, but need to buy another:

If you are looking to sell your current property and replace it with another property, generally, you will be in no better financial position. It is likely, you will have made a profit on your current property due to the housing boom, but due to the housing boom, you will most likely have to use those funds towards your onward purchase and so essentially you will be breaking even or spending more. If you are looking to downsize, you may be in a good position and may be able to make a profit.

Will house prices crash?

It is unlikely that house prices will crash, but they are likely to fall. Whilst mortgage rates are still relatively low, the Bank of England has raised the base rate five times in a row since December 2021 in order to get a handle on soaring inflation.

Whilst those wishing to purchase homes are hoping for the prices to plummet, for those who have just bought homes or have added value to their homes, they are hoping that prices remain stable or even increase to more than what they originally purchased for, in order to make a profit.

With the cost-of-living rising month on month and inflation climbing, more people should be inclined to stay put, weather the storm and put the brakes on the property market’s record-breaking run, but in reality, will this happen? We have seen a buoyant housing market over the last few years with the property market so it is anyone’s guess as to what will happen next.

Whatever you decide to do, Oliver and Co will be here to support you with all your property transactions. Contact us today for a no obligation quote.

Call and speak to a lawyer on 01244 312306