Is It A Good Time To Buy A House In The UK

House prices go up, and they come down. Ideally, you want to time your first home purchase when property prices have hit the bottom of the market according to the property cycle.

Additionally, house prices go up and down according to supply and demand.

When there are more homes for sale and less demand from buyers, it’s a buyer’s market, and they can negotiate more successfully to get a better deal. Of course the reverse is true too, if there are too few homes listed for sale, it’s considers a seller’s market and it is the seller who can hold out until they get the price they want for their property.

Finally, the seasons impact property listings and when it is an excellent time to buy a house in the UK.

The Seasons Impact Property Prices

Let’s look at how the seasons impact property prices. The winter months are the quietest for the property market. There are fewer houses listed for sale; therefore, there are fewer sellers and buyers. Why? Houses usually look better in Spring and Summer when the flowers are blooming.

Staging a home often relies on nice weather to present the indoor-outdoor flow and entertainment areas. If it is cold and damp, prospective homebuyers are not so keen to go to open homes.

The tail end of Winter or early Spring are ideal times for first homebuyers. Sellers listing their properties during winter may want a quick sale. A first homebuyer can get a price close to the asking price and get it.

Economy

In addition to timing the seasons for a discount, there is also timing the economy. A strong economy usually means lower interest rates. Homebuyers want to get pre-approved for a home loan with a low-interest rate.

High interest rates squeeze borrowers as household finances prevent them from meeting the repayment costs to borrow the amount they need to buy the home they want.

House prices are down.

In 2023, property prices fell consequently for six months. However, industry specialists predict that fewer houses are showing further price devaluation. In essence, homes aren’t getting any cheaper. So, this could be the best time to buy if you want to snag a bargain and get the best value for money.

However, everyone’s got an opinion, particularly when everything in the UK is up in the air, so listening to one news outlet without considering more may be foolhardy.

Do your research, and follow economists and news publishers like The Times. This article presents the opportunities for homebuyers in 2024 following a slow property market 2023.

Avoid Negative Equity

All homeowners want to avoid negative equity in their most significant asset. Where the property’s value is less than what’s owed, this is called a ‘negative equity’ position.

Lenders can request a top-up, i.e. pay down the home loans to adhere to lending requirements. Lenders require the homeowners to have an equity position in their home, usually 20% or more of the current market value. Therefore, when a catastrophic event like the Great Recession of 2008-2009 occurs, it can send distressed homeowners to the wall where they walk away from their home, and the lender lists it as a mortgage sale, aka a foreclosure sale.

Property prices are creeping up. Halifax’s house price index says house prices are up 1.3% in January and up 2.5% annually, which suggests the market is looking up. Buying could be the right choice if the homebuyer can secure a reasonable price on a property and afford a loan at 7%. However, the forecast is for house prices to drop further, so maybe waiting is the right move.

Rent vs Mortgage

What is evident is that rents are going up, and while a mortgage will cost you more, rents are not far behind. HomeLet’s Rental Index, the average rent is £1260, a 7.5% annual increase. If the average UK rent is £1059 and the average mortgage repayments are £1262, there’s not much in it.

Summary

So, to conclude, it is potentially a perfect time to buy a house in the UK. There is no hard and fixed rule on when purchasing a home is an excellent time.

The economy is a significant player in determining the state of the property market, so learn to stay attuned to it.

Additionally, understanding your location’s property market is vital, as not all areas perform the same. Some areas remain popular irrespective of general market conditions. Studying property prices in the area you wish to buy in and knowing when you have a good deal will be your guiding light.

For example, if you have negotiated a discount off the asking price and got an affordable mortgage deal with a lower-than-standard interest rate, then it is probably a risk worth taking.

If you’re selling your home, ensure you know when it is an excellent time to sell to get the maximum sales price.