What’s going to happen to house prices?
Many first time buyers would probably argue that house prices remain too high. But, many people who bought a few years ago have seen a considerable drop in the value of their property.
Whatever you’re hoping will happen to property values, it is a key issue when deciding whether now is the right time for you to buy or move house.
When will house prices start increasing again?
No-one can predict with any certainty what will happen to house prices across the UK. Since 2007, they have fallen by an average of 15%, and more recently have been relatively flat.
There are of course exceptions. Property prices have increased in some areas over the past few years – most notably in London, where after a smaller drop in 2007, property price rises have restarted, albeit at a slower rate than before the credit crunch.
In general, most analysts expect house prices to remain fairly flat for the next few years, so waiting on house price movement in either direction may not pay off.
The most important thing to consider when you buy a property is whether you can afford the mortgage now – and would still be able to afford it if you were to take a cut in income, were unable to work or interest rates went up.
Although house price growth is an added benefit, there continues to be a risk that house prices may fall further – but as long as you can meet your mortgage payments, this doesn’t need to be a concern to you in the short run.
House Prices if you’re selling
In a relatively slow housing market it’s really important to be realistic about how much you’re going to get. Looking at local property listings should give you an idea of how much other houses in your area are selling for. A good estate agent, with experience of selling homes like yours in a slow market, will be able to offer advice about what a sensible selling price is.
However, be aware that advertised property prices are not the same as sale prices. To find out what properties have actually sold for, you can look on websites such as the government’s www.landregistry.gov.uk. The latest data may be a few months out of date.
You may not be able to sell your house for as much as you would like – but, remember, you may also be able to buy your next property for a lower price than what the seller wants.
If you’re really worried about the selling price then one option worth considering is let to buy. With a let to buy arrangement you let out your current property until you’re ready to sell – and take out a new mortgage to purchase another property.
House prices if you’re buying
The average house price in the UK is currently around £160,000. But there are places where property is more expensive than this.
If you’re saving for deposit it may feel like a struggle. But, there are options available to you which may bring the size of the deposit you need down.
Shared equity and shared ownership schemes can allow you to purchase a home without saving up a large deposit. There are also a growing number of mortgages where parents can help first time buyers such as guarantor mortgages and family offset mortgages.
Take impartial mortgage advice
Whatever kind of mortgage you’re looking for, one of our advisers would be happy to talk you through the options available to you.
You can speak to a Which? mortgage adviser by calling us on