Should I Buy Now, or Wait Until This All Blows Over?

A common question at the moment is whether or not someone should buy a property and get a mortgage with rates being so high. People have been asking me if now is the right time to buy, or whether they should wait until rates come back down.

Unfortunately, as I have mentioned in a previous blog post, I don’t believe rates are ever going to be coming down to the level they were this time last year. We were incredibly lucky to have rates as low as they were for as long as they were and I personally believe that these days are behind us.

Although rates shot up to the highest they’ve been since the last recession, they have already started to settle a little as lenders’ knee jerk reactions to the rate rises turned out to be a little drastic.

The mortgage market is now a little more stable than it was in the last quarter of 2022, so lenders have started to offer competitive rates once again.

The other concern that people have is about house prices falling. Yes, they have dropped a little over the last 6 months but this isn’t something that a majority of homeowners should worry about. Property prices fluctuate a lot and if you look at prices over the long term, they are almost always on an upwards trend if you wait long enough. As an example, if you buy properties in order to do them up and sell them a year later, a falling housing market may not be the best time for this. If you are going to be living in this property for the next 5 years and have yourself on a 5 year fixed mortgage, then it is highly likely you will see an increase in your homes value, regardless of if it dropped in the middle.

If we take a property of £250,000 that dropped 5% in value to £237,500 in one year. It may be disheartening to know your property is worth less than when you bought it, but if you’d have waited that year to buy it, you probably would have spent more than £12,500 in rent. Alternatively, you could have paid a little bit of capital off the mortgage, so with these figures, you would have been better securing the mortgage in the first place.

In answer to my initial question, I don’t personally think you should wait until this all blows over, because I don’t truly think it will all blow over, so the question then becomes; “Should I buy now, or wait for an undetermined amount of time and buy when rates are still the same?” It becomes more about do you want or need to move? If the answer to that question is yes, then get in touch.