Is now a good time to buy a house? Buy or wait?
A tough market for sellers. So is it a good time to buy a house?
On this page
- Buy a home now and you could drive a hard bargain
- Research house prices. Avoid over commitment and unnecessary risk
House price calculator
The Nationwide has a useful price calculator. It's quick to access and use. See house prices calculator www.nationwide.co.uk 
Opens in a new window, close to be back here.
Is now a good time to buy a house? Could you gain more financially by waiting?
How far and how fast the market will fall is hard to predict
Judging when a property market reaches bottom is notoriously difficult.
It isn't usually clear or obvious until prices are already on the way up again.
Besides, even if the market is at rock bottom, there's no guarantee the right home will be available, in the location you want.
Buy a home now or rent? Which is best financially?
Compare mortgage costs with renting?
If you rent instead of buying a home you still have a large outgoing. And it's a rising one as demand is fuelled by home buyers in waiting. You can't control future rents.
Buying a home now may make more sense if the repayments are similar to renting. Mortgage repayments can only increase with interest rate rises. The capital sum borrowed won't increase.
Get to know house prices your local market
Be ready to buy when the right home is available at the right price - for you.
Buying a house now, you could drive a hard bargain
Follow your local market to judge prices where you are
Sale prices - know your local area. Published house prices are only a guide on where to pitch negotiations.
Spot the best buys based on house price info and local knowledge. Look for sellers who are keen to sell, homes that are sticking especially after one or more price reductions. This is the key local information to help you make a realistic offer, and negotiate the lowest price.
Be wary of overpriced homes. Some sellers won't accept the reality of a falling market, especially with their own home. Ignore them. Avoid overpaying by monitoring prices and knowing your local market.
Look for someone who really needs to sell. There will be genuine, even desperate sellers as the credit crunch results in fewer buyers.
House prices reports seem conflicting
How can Rightmove report increases, where Halifax and Nationwide might show a fall? The fact sellers ask a certain amount (Rightmove reports only asking prices) doesn't necessarily mean the prices will be achieved (Halifax and Nationwide reports reflect sale agreed prices). And the picture varies regionally.
There are wide variations in prices and market activity, from area to area and even within the same town. Forecasts on future interest rates still vary. The safe policy is to avoid being a forced seller. Avoid over commitment. Be confident of sitting out any increase in mortgage repayments.
Avoid unnecessary risk. Don't be over committed
Long term you probably hope for a gain. But avoiding a real loss in hard cash (as happened in the early 90s) is equally important.
You can't always predict how far or for how long house prices could fall. Long term property will be a sound investment. Long term growing demand isn't being matched by supply.
Meantime, it pays to be cautious and not end up over committed.
Don't be a forced seller
This risk arises if two events coincide:
- Falling values cause you to have negative equity. (Where the home is worth less than the mortgage)
- Being unable to keep up loan repayments. You're forced to sell, or the home is repossessed
Any fall in value is disappointing. But it remains only a paper loss, unless you're forced to sell. All of your equity (own cash stake), could be lost. Getting back on the property ladder could take years.
Play safe. Be sure you can keep up mortgage repayments even if interest rates rise. Take a long term view and be philosophical about short term reductions in value. Wait for the market to recover.
Further advice for first time buyers
www.first-time-buyer-advice.co.uk
National market trends can help weigh your options
Following national trends in house prices reports, is a useful guide to decide if the time is right to buy a home. For more go to page house prices news
Research your local market
Every local market is different. Even areas within towns can differ. Only you can decide the right time for buying a home to suit your personal circumstances and the local market. For more go to page how much to pay
