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As Halifax says prices grew 1.1% in October, could waiting for prices to fall further backfire?

ended 07. November 2023

With the Halifax October house price index showing house prices rose by 1.1% last month, and last week's Nationwide HPI showing growth of 0.9% in October, Jonathan Gordon, director of wealth management at global property consultancy, IP Global, said: “Buyers holding out for prices to fall a lot more could find it backfires.” On the back of this, Newspage asked mortgage and property experts whether those buyers who are waiting for prices to fall further are playing a dangerous game. Their views are below.

14 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
I always advise clients that there is never a perfect time to buy and there is always a risk to waiting for things to improve as it might not happen as quickly or as dramatically as they would hope. I’m a firm believer that if the property is what they are looking for and the repayments are affordable and the scenario fits with their future plans, then why wait? The increase in prices is a great sign of the market remaining steady at the very least, if not exactly bouncing back.
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Bob Singh
Founder at Chess Mortgages
In a replay of Nationwide’s figures, Halifax this morning confirmed virtually the same increase in house prices for the previous month but added that they do expect prices to fall beyond this point. Just how much they’ll fall is anyone’s guess but the figures being banded about range from 2%-10%. Homebuyers waiting on the sidelines are hoping to jump in at the bottom of the cycle but it could be a dangerous game to play given news out this morning reveals that the base rate may start to come down as early as June 24 to provide an election boost to the incumbent party. Given the shortage of stock, I feel buyers should focus on buying the right property at the right price than try to call the bottom of the market. In a matter of just two years, we expect rates to normalise and taking a 2-year deal is probably a safe bet. The pent-up demand in the housing market, coupled with lower rates, means prices could start to move forward leaving first-time buyers having to find larger deposits.
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Craig Fish
Director at Lodestone Mortgages
Don't be fooled by this latest set of house price data, as prices still have further to fall and buyers know it. Even the Halifax suggests it in its October report.
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Daniel Wiltshire
Actuary & IFA at Wiltshire Wealth
Too many people talk about the 'property market' like it's a single, homogeneous blob. "Prices are up! Prices are down!", they declare. The picture on the ground is far more complicated. There are distinct regional markets, micro-markets and even good old-fashioned bargains. No one has a crystal ball, so housebuyers should weigh up their options based on their circumstances and the specifics of the properties they're looking to buy.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Whilst October showed small increases in house prices, these were still smaller than the previous few months' falls and are not by any means expected to skyrocket in the short term. Meanwhile, mortgage rates are reducing on the back of consecutive base rate hold decisions from the Bank of England. These two factors could cancel each other out, overall making little difference of when someone buys in the coming months.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
We always remind our clients that until contracts are exchanged, anything can happen. If they find the right property, then waiting or hoping for the price to come down before making an offer could lead to disappointment. The same goes for delaying exchanging contracts in the hope they will get a better fixed rate locked in before completion. It's nice if we can do this without disrupting the timeline, but not worth the risk of losing their property over.
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Michelle Lawson
Director at Lawson Financial
It is really hard to forecast what is happening as the numbers appear to be all over the place depending on which stats you read. The stats are also nationalised and not regionalised so it is imperative to know and understand your area. People will always want to move and buy so it is important that, if people want to 'wait and see what happens', they know what they are waiting for and if it is realistic. Usually what we see is a log jam as sellers don't want to go on the market as they haven't seen anywhere they want to buy but in reality, the ones they want to buy from are thinking of the same. Someone needs to make the first move, however most people are likely to wait until January which is the next key period.
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Elliott Culley
Director at Switch Mortgage Finance
It's likely house prices will reduce some more before stabilising. It's always worth remembering different regions of the country react differently. If mortgage rates continue to reduce, as they are, we may see house prices start to stabilise. Potential buyers should always prioritise the right property over waiting too long for house prices to come down as history shows that's a risky game.
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Malcolm Davidson
Director at UK Moneyman
Not for the first time, property values have held up well in spite of everything. Making predictions on what will happen next is often a fool’s game so whether buyers who wait are taking a risk only time will tell. If they are waiting for mortgage rates to plummet before they buy then they may as well wish it was Christmas every day because the Bank of England has been very clear that the base rate isn’t coming down anytime soon.
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Luke Thompson
Director at PAB Wealth Management
I always think that buyers who are looking to 'time the market' have the wrong idea. In this country, too many people look at owning a residential property as a way to make money. It isn't: a house is somewhere for you to live. Getting caught up in trying to get the exact right time to buy can cause people to lose out. The right time to buy is the point when you need to buy and the value of a house is what you are willing to pay for it. If you are buying a house to live in for the long term, saving £5k or £10k on the purchase price is not going to make a massive difference to your monthly mortgage payments. By waiting, a lot of buyers don't realise that, for example, they could be paying more by renting for longer. These are forgotten costs which people don't think about but which could be costing them thousands of pounds.
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Graham Cox
Director at Bridging Hub
Both the Halifax and Nationwide house price indices are misleading in my view. They report average house prices based on their mortgage approvals. However, what they don't reveal is the proportion of approvals on more expensive properties versus cheaper ones. I believe there are currently a disproportionate number of transactions on the former, wildly distorting their average house price figures. So don't be sucked in, house prices are falling and will likely continue to fall for the next year at least.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
These recent positive house price numbers once more highlight the pitfalls of attempting to 'time the market’ and add further strength to the well-worn adage that “time in the market” rather than attempts to outsmart it will generally be best for most in the longer term. Of course, regional variations and seasonal market fluctuations exist, but until the UK’s fundamentally broken housing system is tackled in a way that significantly increases the supply of properties for both sale and rent, it is hard to see how consistent house price growth over the medium to long term will not continue to be the norm. Fundamentally, for most people, residential property ownership is not about financial gain but primarily about security and a place to call home. As these latest numbers from the Halifax and Nationwide underline, those fixated on finding the perfect moment to buy are playing a very dangerous game.
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Gary Boakes
Director at Verve Financial
It does feel like a fine balance at the moment. Yes we have high rates, but the market is a buyers' market unlike the past few years and you may find that properties that weren't in your price range last year now are. For people waiting for rates to drop, what do they want them to drop to? We know that the decline is going to be very slow over the next 1-2 years and in that time the stamp duty rules will be reverting, meaning an extra £2500 for any homemover buying over £250,000. We all know that after a lull we always have a boost, so prices will rise again, so anyone thinking that they can time this perfectly must have a time machine to see the future, and if they do then they should have bought 2-3 years ago and taken out a 5-year fixed rate.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
In the UK we have a shortage of houses, don't build enough houses, and as a result have a fundamentally inflationary housing market where in the long term house prices have always grown. Waiting until the exact right time comes around historically hasn't made much difference to your overall position now. If you want to move or buy your first home my advice would be to get on and do it as none of us have a crystal ball to say 'but in 6 months houses will be cheaper'.