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When Is The Most Ideal Time To Enter The Housing Market?

After three years of exponential growth in the early part of the 2020s, 2024 sees the housing market in a rather unusual position.

Whilst the precipitous falls in the housing market that were expected by estate agents last year have ultimately failed to occur yet, there is a sense that house prices are expected to fall, although to what extent is still unknown as of yet.

Because of this, buyers, particularly first-time buyers currently in the rental market, are in a state of limbo, uncertain about the best move for their long-term future.

Typically the best time to enter a housing market is at a sweet spot when house prices have reached their lowest ebb alongside low mortgage rates, neither of which is necessarily true at the start of 2024.

House prices have fallen slightly, as have mortgage rates, but with a Bank of England base rate of 5.25 per cent, there are limits to how far the latter will fall. 

This could lead to problems if a buyer locks in a relatively expensive mortgage rate, as it could potentially push someone into negative equity on their home, where the remaining amount on the mortgage is higher than the market value of the house, something that affects flexibility.

As well as this, with a General Election expected within a year, the landscape of the housing market could potentially change as a result of housing policies, either due to a change in government or due to new policies announced by the incumbent one.

This makes it potentially prudent to wait, especially if you can use that time to build up your deposit, improving your affordability and increasing your eligibility for more favourable mortgage terms.

On the other hand, a slower market is also one that rewards the brave, particularly for power buyers who have a lot of leverage by not being in a property chain.

If you are planning to stay in your home for a while, then any house price fall is something that may not even affect you, and there is potential affordability in opting for a marathon mortgage that has a longer payment period but potentially more favourable terms.