Is it a good time to buy a home in the UK?

The only thing we can rely on in the UK housing market currently is, change. It was good news to see inflation inching down a little in July but with the Bank of England still expected to raise interest rates further, the housing market will likely remain, well, changeable.

The trends so far this year

Family viewing a house.

Nationwide Building Society this week reported that house prices have fallen in July by 0.2% month on month, and that the annual house price growth is at -3.8% with the average house price in UK standing at £260,828. This means the price of an average home is 4.5% less than the peak of August 2022.

However, TwentyCi data suggests that in Q2 of 2023 there was 14.5% more sales agreed than in Q1 2023 and asking prices were up 6% on the quarter. This means average asking prices were 24% higher than Q1 2019. TwentyCi also report the continuing shortage of housing stock, especially in lower priced housing, which continues to affect the market.

Is it a good time to buy a home?

There does seem to be resilience in our housing market despite the rise in mortgage rates. Demand for homes is still outstripping supply, and the hope that inflation and mortgage rates will stabilise soon things should make for a more predictable housing market.

Mortgage rates are much higher than in recent times but buying a house could still be more affordable than renting as pressure on the rental market grows. Nationwide predict that small falls in house prices and a stabilising mortgage market should make buying a house and covering the mortgage more affordable over time.

Savills back up this prediction citing strong wage growth and small house price falls contributing to the resilience in the market we’ve seen this year. They also report the rise in longer term mortgages (30-35) years also serves to make mortgage repayments more affordable. Savills also predict there may be on-going falls in house prices into 2024, all helping to stabilise the market.

If you’re looking for a mortgage advisor to help you navigate the current changeable market and find the best mortgage rate for you, please get in touch with our trusted mortgage broker partner.

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