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Post updated: October 16th, 2024
KEY INFORMATION
This article covers some of the key issues you’ll need to consider in order to decide if now is a good time for you to buy a house:
Land Registry’s latest House Price Index report shows the average house price was £293,000. Our September monthly House Price Watch tracking all of the major indices shows house prices up on average +0.8% over the past month and 3.6% over the past year. You can read more about current house prices and what’s happening in your region in our monthly House Price Report.
Analysts and commentators started the year predicting that house prices would drop further in 2024, with experts’ estimates ranging from falls of 1%-3%. But despite some fluctuations across 2024 so far, it’s now expected that average house prices will increase by end of the year. House prices are notoriously tricky to predict but with the end of 2024 in sight, Zoopla predicts an increase of 1.5% while Savills’ forecast that average prices will increase by 2.5% over 2024. For more analysis of future house price predictions, see our house price forecast.
Ideally, you’d buy a home when house prices and mortgage rates are at their lowest. But guessing when that optimal point is would involve having a very effective crystal ball.
If you’re considering waiting to buy a house because you expect house prices to fall in 2024 and into 2025, it’s important to recognise that a house price forecast is just an estimation – and they can be wrong. For example, there were predictions that house prices would plummet by 20% in 2023 and this didn’t happen. As mentioned, house prices are more likely to continue to edge up in 2024.
Waiting for house prices to drop before buying a house may mean you never buy. While rising house prices aren’t the best news for aspiring home buyers, it’s more important to look at what you can afford and how much you are able to borrow.
Mortgage rates are finally improving following the Bank of England decision to cut the base rate in August 2024 – the first time since March 2020. While we’re unlikely to see a series of consecutive cuts to the base rate — possibly one more this year in November – mortgage rates are likely to continue to improve, edging down.
Interest rates have improved across 2024. In early January, the average 2 year fixed mortgage rate was 5.93%, while the average 5 year fixed mortgage rate was 5.54%. By comparison, the best mortgage rate on a 2 year fix now is 4.42% and the best rate on a 5 year fix is 4.03%.
Check out the latest rates in our guide on the Best Mortgage Rates and get a no-obligation call with our fee-free mortgage broker partners at L&C to see how much you can afford.
Whether now is a good time to buy or not for you will depend on how much you can afford. So if you’ve found the right property and an affordable mortgage, now may just be the best time to buy.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
If you’re a first time buyer, access to mortgages, especially if you have a small deposit is also a key consideration. High loan to value (LTV) mortgages are currently much more widely available following the government’s introduction of the mortgage guarantee scheme, which runs until June 2025.
While many lenders are offering high LTV mortgages without using the scheme, no-one knows what will happen once the scheme ends.
The mortgage interest rate you’ll be able to get access to will be driven by factors including:
You may be considering saving for a bigger deposit instead of buying now. Having a bigger deposit means you’ll have a wider choice of lenders to choose from and you’ll usually get a better rate.
But no one knows what will happen to mortgage rates in the next year. For example, no one can say with any accuracy that the mortgage rate available on a 90% LTV mortgage next year will be lower than the best mortgage rate on a 95% LTV mortgage this year.
So as a starting point, speak to a mortgage broker about what your options are based on your current circumstances and then you can decide what’s best for you. Many lenders offer 95% LTV mortgages and Skipton Building Society still offers a 100% mortgage for those with a proven ‘track record’ of paying rent.
However if you’re buying your first home with a small deposit and prices do drop sharply you may be at greater risk of negative equity until prices recover. Negative equity occurs when the market value of a house is below the outstanding mortgage secured on it. And if you’re in negative equity and you want to sell your home it’s a major concern. Find out more in our guide What can I do about negative equity.
Spring is considered the best time to buy a house because there are more homes on the market. And while listings tend to tail off in the summer they generally pick up again during September, October and early November before tailing off for Christmas.
But when considering the question is now a good time to buy a house don’t get fixated on the best or worst times of the year to buy. If you’re house hunting, keep looking. Your dream home might come on the market in the depths of winter and if there are fewer buyers looking it boosts your chances of getting the property and at a good price.
To decide whether to rent or buy a house, you need to consider what’s happening in the rental market. According to the Homelet Rental Index, the average monthly rent in the UK was £1,308 in August 2024, an increase of 5.2% compared to the previous year.
If you’re paying a fortune on rent it may be tricky to save up enough to buy a house. But it is possible to buy a house with a small deposit. Read our guide on Government schemes to help you buy a home
Read more in our guide Buying vs renting: Benefits of buying
If you’re struggling to buy a house on your own, buying a house with your parents might be the answer. There are a number of ways they can help you get on the property ladder, if they’re not able to give you a lump sum from the Bank of Mum and Dad to help with your deposit. Here are four options:
Guarantor mortgages are when someone – usually a family member like a parent – acts as a guarantor by putting up savings or their property as security. This can make it much easier to get a first time buyer to get a mortgage but the risks to the guarantor can be significant. Read more in our guide Guarantor mortgages explained.
With family offset mortgages, the amount of interest the borrower pays is reduced by linking their mortgage deal to a family member’s savings account. There are some drawbacks though, for example the parent won’t earn interest on their savings.
By taking out a joint mortgage with your child, you will be equally liable for the repayment of the loan. The upside is that with your combined incomes, you may be able to afford to take on a larger loan. However, a major drawback is that you’ll need to pay the additional stamp duty rate if you already own a property, then your child’s new home would count as a second home. Plus if it is your second home and you are still on the mortgage when the property is sold, there may be capital gains tax (CGT) liabilities.
With these mortgages, you apply with someone who’s willing to accept joint responsibility for making mortgage payments without having a legal claim to the property. Find out more in our guide Joint borrow, sole proprietor mortgages explained
Yes. If you want to sell your house, whether that’s because you need to relocate or need to buy a bigger house, don’t let speculation about property prices put you off taking action. Even if you need to sell your house for less than you’d hoped, you will hopefully find the property you want to buy has also dropped in value. Read more in our guide Should I sell my house now?
Buying a house and saving for retirement at the same time can be difficult so you might be tempted to stop your pensions contributions until you buy your first home. But this may be something you end up regretting. You may find it useful to speak to an independent financial advisor about about your finances including your pension,
You don’t have to make life’s big financial decisions alone. Get the right IFA for you today with our partners at Unbiased.
Deciding not to buy a house because you’re waiting for a recession is risky. Firstly, a recession may not happen. But if it does, house prices may fall but your financial situation may get worse as well and you may struggle to get a mortgage. So rather than waiting to see what might happen in the future, it’s a good idea to speak to a mortgage broker to find out what you can borrow on a mortgage based on your current situation.
If you want to start a business, bear in mind it can be more difficult to get a mortgage if you’re self-employed, until you can show at least two years worth of accounts. Find more information in our guide on self-employed mortgages.
There are a number of fees when buying a home, including legal fees and a survey, which can add more than 10% to the total bill. So when you’re looking at is now a good time to buy a house make sure you can afford to cover all the costs you’ll need to pay. Find out more in our guide on The costs of buying a house.
The mortgage guarantee scheme, launched in April 2021, was designed to help increase the supply of 5% deposit mortgages by supporting lenders to offer these products through a government-backed guarantee. The scheme is due to end in June 2025.
Get fee-free mortgage advice from the experts. Start online or give them a call today about your mortgage needs
The Right to Buy government scheme gives people the chance to buy the council house they are currently renting at a discounted rate. So if you’re asking is now a good time to buy a house and you’re eligible for the right to buy scheme it’s worth exploring further. And under new rules it will soon be extended to Housing Association tenants. Read more in our guide Right to Buy explained
If you’re asking is now a good time to buy a house and you’re a first time buyer you’re probably asking what is the best type of mortgage too. Many first time buyers choose fixed rate mortgages so they have security of knowing how much their repayments will be each month.
While other first time buyers take out variable rate deals. If you’re asking is now a good time to buy a house it’s vital that you choose the best mortgage for you. And the quickest and easiest way to do this is to speak to a fee-free mortgage broker who will lay out all your options for you.
October 30, 2024 
