Housing Market News And Views House Price Crash: Should You Buy?

Date Published:

23/12/2008

Britain is witnessing its worst house price collapse since records began 25 years ago, according to the Halifax. At its peak in October 2007, the average home was worth about £198,000, but it has dropped by around £30,000 over the last 12 months. Property-finding website rightmove.co.uk goes as far as saying the housing market is unlikely to ever be the same again. So is this a good time for buyers to wade in and pick up a bargain. Or should you gamble and wait to see if the market will drop further still? Plus how easy is it to pick up a mortgage and at what cost?

By Sarah Jagger

What Is The Housing Market Predicted To Do In 2009?

It’s not a gamble to buy now but it is a gamble to wait says Ray Boulger at independent mortgage broker Charcol. ‘I would recommend aiming to buy by the middle of 2009 because I think the sharp falls in interest rates will result in the housing market stabilising by then, despite the fact that not all the Bank of England’s rate cuts will be passed on to borrowers,’ he says.

However some experts are predicting the decline will continue to the end of 2009, with house prices still having a further 15 per cent or even 30 per cent drop to go. ‘Nobody can know how long this is all going to take to turn around and we should be highly speculative of anyone who claims to be able to do so,’ says Phil Spencer. ‘My best guess is that house prices have another 10 per cent to 15 per cent to fall, but that the market should have stabilised towards the end of 2009,' he adds. And the National Housing Federation says we should look to 2011 for property prices to rise again.

Is Now The Right Time To Buy?

Before you weigh up the timing of your purchase, you should give serious thought to whether it makes sense for you to buy at all. ‘Bear in mind the costs of buying and selling, particularly if the purchase price is over £250,000 (as you’ll have to pay stamp duty) and the risk the market will still be difficult for some time,’ continues Ray Boulger. ‘It only makes sense to buy if you anticipate staying in the property for at least three years,’ he advises.

You should also consider the ongoing, ever-rising costs of running the property and if you can afford the impact any interest rate rises will have on your monthly mortgage repayments.

For More About Buying & Selling

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