To purchase or wait – the buyer’s conundrum

High interest rates, falling house prices and a cost of living crisis – headlines we have become increasingly accustomed to. It’s no secret that there has been a dark cloud over the property market for almost a year now and it feels as though every day there is something else holding people back from buying a home. However, it all comes down to perspective.

Interest rates are now the highest they have been since the crash – a worry for people currently on low rates and nearing their mortgage renewal – but what about those looking to enter the market? With rents rising by 5.1% on average¹, non-homeowners are still feeling the squeeze on their pockets. So, if it is affordable, why wouldn’t you start the process to becoming a mortgage-free homeowner?

Affordability remains a central concern to consumers. With rising rates and increased cost of living, the amount you can borrow is down 20% on average.² While this does have a significant impact on consumers looking to maximise their borrowing, for those more conservative would-be homeowners, it highlights the importance of a good broker − someone who can do the legwork and find a lender who can not only provide the borrowing required, but ensure it’s the best deal available for the customer’s particular circumstances.

Falling house prices is a key feature of a buyers’ market. With the average house price down 2.6% in June compared to the year before³, you can arguably get more for your money now than you could 12 months ago. With HMRC reporting transactions are down 12% year-on-year⁴, there will undoubtedly be a number of vendors willing to consider lower offers to ensure quicker sales.

There is light at the end of the tunnel with inflation data better than expected.⁵ After the last few turbulent months, things are starting to move in the right direction which could see further base rate rises ease off if the trend continues − a benefit which newer homeowners could reap in the years to come.

Sources:

¹ https://www.mpamag.com/uk/mortgage-types/buy-to-let/rents-now-51-higher-than-last-year/453214

² https://www.mpamag.com/uk/mortgage-industry/market-trends/available-loan-size-down-by-nearly-20-mbt/452390

³ https://www.mpamag.com/uk/mortgage-types/residential/house-prices-down-again-halifax/451864

⁴ https://www.mpamag.com/uk/news/general/property-transaction-numbers-down-again-hmrc/451218

⁵ https://www.mpamag.com/uk/news/general/uk-inflation-slides-to-79/453165