Is now a good time to buy a house?

You might think that it’s not a great time right now to be seeking a new home, but actually, not only is January a good time to start the ball rolling on a home move, but at the moment, the market is active with people looking to sell their home for reasons that are relatively new to most of us. 

At the moment we are seeing two ‘new’ types of seller coming to market:

1. Those whose fixed rate mortgages are set in 2018 to 2021 are coming to an end. For those people who had stretched themselves to afford their home, it’s a stressful time with current mortgage rates being so much higher than previously. With remortgages offering higher rates than homeowners might be able to manage, there are sellers seeking to place themselves in a more comfortable position and remove the uncertainty of the future.
2. Older couples decide to downsize their homes to something more economical. It’s our experience that many family-sized homes are occupied by empty-nesters, whose children have grown and gone, yet they still maintain the family home – after all they are happy there, and it holds all the memories. However, there comes a point when downsizing makes sense, and there is often a trigger for this, such as at the moment a sudden increase in fuel bills. 

Both these aspects of life in 2023 mean that houses and apartments are coming onto the market with the owners hoping for a fast sale. What does this mean for the homebuyer? (Many of which are also home sellers, of course)

1. House prices have levelled out, which means that there is a reduced risk of negative equity. 
2. You may find homeowners are more open to negotiation on their asking price.

Finally, new mortgages are not spiking as they did back at the end of last year. In fact, average mortgage rates showed a drop in December, even if they still finished the year considerably higher than at the start of 2022.

The latest data from Moneyfacts shows that the average interest rate charged on a two-year fixed rate mortgage was 5.79% on 30 December 2022, compared with 2.38% on New Year’s Day 2022. Similarly, the average five-year fixed rate ended last year at 5.63%, up from the average of 2.66% recorded 12 months earlier. However, despite the significant increases in the last 12 months, it’s worth noting that mortgage rates have dropped since the sudden increases seen in the aftermath of last September’s mini-budget. A more confident financial market means a more competitive financial market, so it’s definitely worth spending some time with a mortgage expert to find out what the options are.

Finally, we believe that those people considering buying a new home, upsizing or downsizing, should base their decision on their current situation, not on what might or might not happen to house prices or interest rates over the next 12 to 24 months. 

If moving home is right for your family or your job, you should move home. Call my team on 0161 882 2233 today.

Eddie – Friday 6th January 2023 – (Picture used from The Box Works, Acres Road, Chorlton Green).