Is Now a Good Time to Buy a House?

Buying a new home is a big decision, and you want to be confident you’re doing it at the right time. Here’s what to consider to work out if now is the right time to buy a house.

Am I ready to buy a house?

Before worrying about external factors like house prices and the mortgage market, consider whether you are personally ready to buy a house.

The right time to buy a house is individual to everyone, and there might be a reason you want to buy soon, like you need to move for work, or your family is growing and you need more space. 

However, here are some of the signs that mean you might be ready to buy a house:

  • You have savings for your deposit and moving costs

  • Your credit score is strong

  • You don’t have a large amount of debt

  • You have a steady income

  • You’ve found an area you want to settle in

What’s happening to house prices in 2024?

House prices fell in 2023 due to high mortgage rates and a cost of living crisis hitting the market. According to Nationwide’s house price index, house prices fell 1.8% over the course of 2023.

Most forecasts suggest that house prices will continue to fall in 2024, with a similar 2% drop predicted by many. However, other experts suggest prices will be higher by the end of 2024 than at the start of the year.

One of the main reasons for the fall in house prices has been the increased cost of mortgages. High mortgage rates have made borrowing much more expensive, putting people off from moving and reducing demand. 

What’s happening to mortgage rates in 2024?

Mortgage rates are gradually coming down after rising sharply in 2022 and the first half of 2023. These increases were in response to the Bank of England base rate, which went up from 0.1% to 5.25% to tackle rising inflation.

At their highest point, the average 2-year fixed rate mortgage was 6.86% in the summer of 2023. The average is currently 5.64% (January 2024), with the best rates available at just over 4%. 

The base rate has remained at 5.25% since August 2023, and many predict it will be cut in the Spring, provided inflation continues to fall. This is good news for mortgage rates, and we could see them continue to go down in 2024.

However, several factors impact mortgage rates, so it’s impossible to predict with certainty what will happen. It’s also important to recognise that although rates are going down, they are still far higher than they have been in the past.

When is the best time of year to buy a house?

When considering the best time of year to buy a home in the UK, there are several things to consider. 

Traditionally, spring is one of the most popular times to buy. Improving weather and people wanting to move for the summer means there are usually a lot more properties on the market at this time.

This means you’ll have more choices, but there may also be more competition and higher demand that could push prices up. 

It might be best to look when competition is at its lowest to get a good deal. This tends to be during the peak of summer and towards the end of the year. 

Chances are there will be fewer properties on the market at this time, but you could stand a better chance of getting a good deal. The end of the year can sometimes be a good time to get a good deal with developers, who may have end-of-year targets to meet.

While seasonal trends can give you an idea of when the market could be favourable, the right time to buy ultimately depends on your individual situation and preferences. 

Should I buy now or wait?

Whether or not you should buy now ultimately depends on your situation and why you want to move. Your decision to move should be driven by your needs and desires rather than market factors. 

If you can afford a deposit and have the income to get a mortgage you can afford, don’t be put off from getting onto the property ladder.

It may be tempting to wait for house prices and mortgage rates to fall further, but it’s impossible to predict when the perfect time will be. Buying a home is a long-term investment, so if you plan on living in the property for a long period, there’s a good chance it will increase in value.

Reasons to wait

  • Mortgage rates are still high but are projected to fall during 2024

  • House prices are also forecast to fall further this year

  • Risk of negative equity if you buy now and prices continue to fall

  • You could be able to build up a bigger deposit pot

Reasons to buy now

  • When you buy your own home, you will be paying off your own mortgage rather than someone else’s when renting

  • You’ll have security against rising rent and being asked to move out

  • There is no way to know if or when house prices will hit bottom before increasing again

  • The sooner you’re on the property ladder, the sooner you can build equity

Renting vs buying

If you're deciding between renting a property and buying, it’s worth considering the rental market. The cost of rent increased by more than 8% in 2023, with the average rent in the UK standing at £1,279 in November 2023, with further increases forecasted for 2024.

Although renting can be expensive, it offers more flexibility than buying your own home. However, with the high cost of rent, it can be difficult to save up for a deposit to buy a house in the future. 

Find out more about renting vs buying here, including the pros and cons of each.

Our expert says…

“It’s sensible to look at market factors when buying a house, but don’t let them put you off if you’re financially ready to take the plunge.

House prices and mortgage rates fluctuate over time, and it might never feel like the perfect time to buy. If you’re ready to move and get a mortgage you can afford, there’s no reason to wait.”

Is now a good time to buy a house? FAQs

Although property prices have been falling, property remains a good investment option. However, whether buying a property as an investment is the right option for you depends on your personal and financial circumstances.

If you are considering buying a buy-to-let as an investment, it may be more risky than it has been due to declining prices. Over the long term, property is still considered a safe investment option, but remember that all investments carry some risk, so it’s a good idea to get expert advice first.

As house prices are currently going down and forecast to decrease further during 2024, now could be a good time to sell and capitalise on price growth over the last few years. 

It’s impossible to predict what will happen with house prices accurately, so there is always a risk you may miss out on a better price if you sell now rather than waiting.

However, if you need to move, don’t be put off by what’s happening in the market and be sure to do what’s right for you and your situation.

This entirely depends on you and the size of your deposit. If you only have a small amount saved up, having a larger deposit could help you get a mortgage deal. 

Most mortgage lenders require a deposit of at least 5% of the purchase price, but the more you can contribute, the lower the interest rate you’ll be offered.

If you’re living with family and not paying a high rent, spending some time building up a larger deposit could save you in the long run. However, if you’re paying a high rent, it might be better to get on the property ladder as soon as possible.

Buying a house can be a long process, and how long it will take depends on several factors, including the size of the property chain you’re in, any problems that come up on surveys and your finances.

You can expect the whole process, from viewing properties to getting the keys, to take around six months. However, buying a house in as little as two or three months is possible if you’re not in a chain, are a first-time buyer, and have all your finances in place