Is now a good time to buy a property?

Buying a property is a big commitment. In fact, for most people it is the largest and longest-lasting financial commitment they will ever make.

With the cost of living seemingly going up by the day, now may not seem like the best time to consider buying a new home. It’s important to acknowledge, however, that even with rising inflation, mortgage interest rates are at a historic low and borrowing is currently far more affordable than it has been at many points in history. The bigger challenge at the moment is the rate at which property prices are growing.

Danny Luke, managing director of property buying firm Quick Move Now, says: “Whilst buyers may be concerned about rising interest rates, they are still really comparatively very low. The biggest challenge buyers currently face is the cost of housing and how much that has increased over the last two years.  The average house price is now more than 11 times the average UK salary. With most mortgage lenders willing to lend between 4 and 5 times your annual salary, many would-be buyers are left with a significant shortfall that prohibits them from getting a foot on the ladder.

“Despite many predictions over the last few years, property prices have only grown. Whilst there continues to be more buyers looking to move than properties on the market, it is unlikely that we will see any significant price falls. Rising inflation may lead to a slowing of the market and a slight drop in demand, which would help to rebalance the market, but it’s unlikely to result in significant price drops and more likely to simply slow the level of growth. I think, with external financial factors, we’re probably likely to see property prices reaching a peak in the next six to twelve months that they’re unlikely to go beyond.

“In short, whether it’s currently a good time to sell will very much depend on your individual circumstances. If you have the financial capability to secure sufficient mortgage lending, you may want to tie in the low interest rates that are currently on offer.

"You are probably unlikely to see the price of properties drop significantly over the next year and, in fact, we may continue to see them rise further with the current imbalance between supply and demand, so if you have a strong need to buyer there is little point in holding off in the hope of price drops, especially if you’re planning for your next purchase to be a long-term home.

"If, however, you’re unsure how long you plan to be in your next home, you may want to avoid buying near the height of the market. Property price growth simply cannot continue at its current rate. Inflation and increased caution mean that property prices will reach a peak. They are unlikely to fall significantly from that peak, but they certainly won’t go beyond it for the next few years, which could make things financially challenging if you find yourself in need of a quick sale.”