Hello there! Lately, a lot of my clients have been asking me if they should buy a property now or wait for a better time. I understand their concern, especially with the current economic situation. Let me share my thoughts with you.
The housing market has been slowly adjusting since last year's Mini Budget. House prices have continued to rise over the last six months, but at a slower rate than before. According to the Office for National Statistics, the average UK house price increased by 9.3% in the year to December 2022, but only by 6.3% in the year to January 2023. While the average house price is now £290,000, which is £17,000 more than at the beginning of 2022, rising prices still make it difficult for many people to afford a property.
Interest rates have also been rising gradually, and in March, the Bank of England raised them for the 11th consecutive time, putting them at 4.25%. This has had a significant impact on first-time buyers, whose average price paid fell by 1.5% between December and January. Meanwhile, home movers saw a smaller fall in the average price paid.
With all of this uncertainty, it's understandable that buyers are wondering what to do next. But predicting the future is challenging, as market conditions can change quickly. For example, although inflation is expected to halve this year, we saw a surprise jump in February that added more pressure on people's finances.
Although this can be overwhelming, I believe that borrowers need advice now more than ever. It's not just about mortgages; looking at a person's finances as a whole during this turbulent period can help clients make the right financial decisions. For example, I'm happy that I can offer advice on protection insurance. This can provide a strong foundation for your financial planning, from mortgages to estate planning.
Ultimately, people should think about what's right for them at this moment. If the desire to move is strong and affordable, these should be the key drivers.
Trying to time the market perfectly is like catching a falling knife: difficult and not always successful!
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