Should first-time buyers wait until house prices have fallen?

Buying your very first home is always a mixture of anxiety and excitement, but in the midst of a recession and a cost of living crisis that looks set to continue into the new year, should first-time buyers be making the move, or staying put?

Context is key

Many first time buyers will currently be living in rented accommodation and working hard to save the necessary funds to cover a deposit and the fees and costs associated with property purchases. With the cost of living crisis biting hard this winter, it will be even harder to save for many people, making the aim of purchasing that first property feel less achievable. With interest rates rising (although not as much, or as quickly, as some had predicted) and the knock on effect this has on mortgage rates, this might feel like another reason to remain in rented. For those living with family, the situation may be less acutely challenging, but the question of interest rates and the availability of competitive mortgage products remains.

Renting can be risky

However, living in rented accommodation also has its risks in the current climate. Landlords may be looking to sell their properties and there is less likely to be a queue of buy-to-let landlords looking to purchase with sitting tenants. The risk of receiving a section 21 no fault eviction remains hanging over tenants no matter how conscientious they are. Even if the landlord retains the property, the likelihood of them needing to action an increase in the rental price is high and this, in turn, could make renting financially unviable. Indeed, the Office for National Statistics indicates that private rental prices have increased by 4% in the year to October, the largest increase since records began.

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Buy, buy, buy?

So should first time buyers wait to get on the property ladder, anticipating that a fall in house prices is on the horizon? Although house prices are predicted to fall, there are variations in expert predictions as to how much and how quickly this might happen. Interest rates have risen, and of course, the mortgage market reflects this, but it is not yet known if they will rise again, remain static, or even start to fall again. The change in Stamp Duty thresholds is now only temporary, and for first time buyers who miss the window of the beneficial rates, this could represent a significant additional cost to their purchase. No matter what the property purchase, engaging a high quality conveyancer such as Sam Conveyancing, is just as crucial as carrying out a home buyers survey Birmingham, for example, house prices are predicted to rise more than any other city in the UK over the next five years, with the trend in rental rates mirroring this.

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In conclusion, there will always be properties on the market, mortgages available, and good reasons to make purchases, such as increasing family size, relocating for work, and so forth. First time buyers could choose to wait to buy their first home but without knowing exactly how the economic picture will change, and when, it seems that anyone who has the funds and desire to purchase property should consider starting the search for their dream first home.

Kei Taylor


Exploring life's joys & inspirations through a woman's lens. Empowering and embracing every moment. Join me on a journey of style, wellness & more

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