Should I Buy a House Now or Wait?

Buying a New House | Mortgage Advice in Doncaster

First Time Buyer Mortgage Advice | Mortgage Advisor in Doncaster

One of the most frequently asked questions by potential home buyers over the years is “Should I buy a house now or wait?”.

The so-called “experts” who told us that a vote to leave the European Union in 2016 would lead to an almost immediate Recession were proved wrong and now the general public has a distinct impression that commentators and politicians can’t be trusted anymore.

As such, how can anyone really predict what the impact of any such external factor would be on the UK property market?

Buying a first home is an enormous step, possibly the biggest financial commitment that you will ever make. No First Time Buyer likes the idea of acquiring their first home only for it to be worth 10% less a few months later! The same applies to potential home movers. We can learn a lot from history here though, however.

There was a time that we as a nation didn’t really realise that the value of a property could go down as well as up. This was put paid to follow the 1991 recession with sky-high interest rates leading to a high number of repossessions (since the Bank of England was granted independence in 2007 interest rates have remained much lower).

So if you bought in the late ’80s (a “peak” as it turned out) then your investment would have gone down in value.

So buying a home could be a bit of a disaster then? Well, for some people, unfortunately, yes, but if you were caught up in that at that time and were able to keep up payments on your mortgage then the value of your property did recover.

In fact, it likely did a little better than recover. Despite the calamitous Recession, the average value of the property exceeded that previous peak by the early 2000s and by what turned out to be the next “peak” in 2007 that same house would have probably been worth perhaps twice as much.

Following the infamous worldwide financial crash of 2008, again property values plummeted, this time almost 16%. Again though, the British public’s love affair with homeownership continued and a new all-time high was reached again.

Are we sitting at another “peak” of the market? No one ever knows, but if you do not overstretch yourself in terms of borrowing and take out a fixed rate mortgage to protect yourself against future interest rate rises then history suggests that even if you buy at the “wrong” time then given a long enough period you make your money back.

History is not always an accurate guide to future values when it comes to a long-term investment like a house, but is renting a really a better option for you?

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