It is a tense time in the housing market at the moment with potential home movers holding out to see which way the property market goes in the next few months.
The Bank of England base rate is now 3% bringing with it higher mortgage rates which in turn make for a nervous market.
While experts disagree about the severity of the drop, one thing for sure is that the property boom caused by the race for space and the stamp duty holiday is over.
So should people looking to move wait until interest rates and property prices before moving or should they buy now?
Here are five factors to bear in mind if you are weighing up whether to stay or to go:
Movers: If you need to move, move
Without the benefit of a crystal ball, you will be lucky to sell high and buy low. The reality is that if the market falls by an average of 10 per cent, it’s not just the house you are buying that will fall in value but the house you are selling too.
You will always need somewhere to live so, if you need to move for work, for more space, or to be closer to family, do it.
First timer buyers
So you’re a first-time buyer, do you hang around with mum and dad indefinitely or do you take the ultimate step into adulthood?
This is a tricky one, if you wait you can save more of a deposit and if property prices drop, that deposit will take you further. However, if the market picks up again you could find the market out-paces you and you will be stuck in your childhood bedroom for longer.
If you are a first-time buyer who is living in a rental property, you will need to weigh up the costs of buying against the amount you are spending on rent. As mortgage rates rise, so will rents, why pay someone else’s mortgage when you could be paying your own?
Buying during a recession
Bagging a bargain during a recession then sitting back while the value of your property rises is a dream, the reality is that during a recession people’s incomes are squeezed and their jobs are less secure. What is more, banks tighten their affordability checks during times of financial distress. Rather than waiting to buy at the bottom of the market, concentrate on making sure you are as financially secure as possible before you make an offer.
The nightmare of negative equity
If house prices fall by 10 per cent or more, those who have a loan for more than 90 per cent of the value of their property will be in what is known as negative equity, with a loan worth more than their property. If you buy with the biggest deposit you can muster, you can weather the storm and remember, the bigger your deposit, the better the interest rate your lender will offer you.
A house is for living, not flipping
The days of flipping property to make a quick profit is over, but if you plan to live in the property and you can afford it, it is still worth making the move. We have come to think of property as a source of wealth, but for the majority they our homes not investments. If you love it, can afford it, buy it, live in it.