Should I buy if house prices are falling?

A reader from Bath wants to know if he should wait before buying or go into the property market while prices are falling.

Tony Davis, myfinances.co.uk mortgage expert from Mortgage Meadow, takes him through the problem.

Anthony asks :

With the current housing market in a slump, is now a good time to buy?

Tony replies:

Well now, that is a question.

There are those that would say sit tight and see what happens to the housing market, because they believe we are on the edge of a serious global economic downturn and as such to buy today you could be paying far more than in a month's time, moreover, buy today and how do you know you can afford to keep paying tomorrow, with the looming clouds of recession, and all it brings, on the horizon.

Equally, there are those that believe that house prices might have cooled but is has been a minor adjustment in established areas of established housing stock and that owning your home is of greater importance than potentially a short-term dip in value.

If you are not making repayments each month you are paying rent and therefore paying off someone's mortgage for them instead of you.

Both views have their merits and you have decide principally why you are buying (speculation verses a place to live), can you afford to buy and keep affording and if you buy what are your longer term plans.

The best advice I can offer is to speak to as many people as possible to build up your own, informed opinion.


If you have a question for Tony, go to the myfinances.co.uk Ask the Mortgage Expert section.

Or for more information or mortgage advice go to Mortgage Meadow.

Mortgage Meadow is an independent mortgage broker and is authorised and regulated by the Financial Services Authority.