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What’s Going to Happen to House Prices?

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What’s going to happen to house prices?


Whatever you’re hoping will happen to property values, it is a key issue when deciding whether now is the right time for you to buy or move house.

It is unlikely that house prices will take a hit straight away but it is possible that we will see slower price growth and fewer transactions going through in the coming months. This is due to economic uncertainty as buyers and sellers tend to adopt a ‘wait and see’ attitude. There is already evidence of a drop in transactions in the weeks leading up to the referendum even though prices remained stable.

There is a possibility of house price increases, but this is ultimately speculation. Talk of the housing market caving in may be off the mark, but Brexit could potentially mean the end of the double-digit growth that some areas have enjoyed in the recent years. It’s still too early to tell.

This may not be the case as there are still too many people competing for too few homes; it’s all about supply and demand. House prices could remain stable as homeowners remain uncertain about selling and the possibility of construction rates slowing down. Now that the Bank of England has chosen to cut their base rate to 0.25% more cheap mortgage deals could become available and lead to greater demand at the lower end of the market.

If you’re considering buying a home it’s really important to get to grips with the property market in your local area – speaking to an estate agent can help with this. The most important thing to consider when you buy a property is whether you can afford the mortgage both now and in the future. It’s important to make sure you would still be able to afford it if circumstances changed, if for example you were to take a cut in income, were unable to work, or interest rates went up. For many buyers high house prices can make saving for deposit feel like a struggle. Lower prices would make it a little easier for first time buyers to get together the deposit they need, but if prices fall only slightly it will still be tough. But, there are options available to you which may bring the size of the deposit you need down. Shared equity and shared ownership schemes can allow you to purchase a home without saving up a large deposit. There are also a growing number of mortgages where parents can help first time buyers such as guarantor mortgages and family offset mortgages. Every situation is different, call us on 0800 316 4071 and speak to one of our advisers about your circumstances and get advice completely tailored to your needs.

When it comes to selling the focus is of course on getting the best possible price for your property at a point in time. In a relatively slow housing market it’s really important to be realistic about how much you’re going to get. Looking at local property listings should give you an idea of how much other houses in your area are selling for. A good estate agent, with experience of selling homes like yours in a slow market, will be able to offer advice about what a sensible selling price is. However, be aware that advertised property prices are not the same as sale prices. To find out what properties have actually sold for, you can look on websites such as the government’s land registry. The latest data may be a few months out of date. You may not be able to sell your house for as much as you would like – but, remember, you may also be able to buy your next property for a lower price than what the seller wants. If you’re really worried about the selling price then one option worth considering is let to buy. With a let to buy arrangement you let out your current property until you’re ready to sell – and take out a new mortgage to purchase another property. The let to buy process is considerably more complex than the process for a standard residential or buy to let mortgage; our advisers can talk you through the risks and potential benefits. Call 0800 316 4071 to speak to one of our independent mortgage advisers or find more general advice below in our let to buy step-by-step guide.

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