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Will house price fortune favour the patient, or the bold?

ended 19. October 2023

Over the past month or so, lenders have been reducing their fixed rates in an effort to stimulate the purchase market, which one broker has described as “stagnant” — a figure backed up by data from the Office for National Statistics, which showed UK residential property transactions in August were 16% lower than the same month last year. 

Experts have said one major contributor to the lack of activity in the property market is people waiting for house prices to fall further, but are divided on whether this is a wise move. So with many prospective buyers gambling on further house price falls, will fortune favour the patient — or the bold? 

According to Graham Cox, founder of the Bristol-based broker, Self Employed Mortgage Hub, the answer for prospective buyers is simple, and that's sit tight: “Unless you really have to, there's very little incentive to buy now when it's almost certain that property prices and possibly mortgage rates will be lower in six months' time. Property values right now are falling sharply in my opinion."

Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, broadly agreed: “As more properties pile up on the portals gathering dust, in what is a stagnant market, vendors will have to further reduce their asking prices to compete for buyers. Many buyers at present see mortgage rates and house prices as too high and feel that both will hopefully fall over the next 12 months and so are sitting on their hands. So perhaps fortune will favour the patient.”

But Peter Stamford, director at Alston-based Moor Mortgages, believes the exact opposite is the case: "I have a friend who waited in 2016 but the time wasn't right with his job. Then he waited again in 2018 because the time wasn't right with Brexit coming up. Then he waited in 2020 because the time wasn't right with Covid. He is currently waiting because the time isn't right with interest rates. If he had moved in 2016, he would have saved thousands and thousands in rent and have a good amount of equity in his property. Fortune favours the bold."

Jack Tutton, director at SJ Mortgages, says he is seeing a lot of buyers holding off but that there are no guarantees things will work out in their favour: “The property market has swung from a strong sellers' market where people were achieving offers well over the asking price to the complete opposite in the space of 18 months. We are seeing a lot of prospective buyers holding off as they believe that they will get a better deal by waiting for both house prices and interest rates to fall. The issue with this tactic, as we saw when mortgage rates increased sharply after the mini-Budget last year, is you cannot predict the future and you cannot ensure that you will get a better deal.”

For Darryl Dhoffer, director at Bedford-based broker, The Mortgage Expert, people should be neither bold nor patient, but instead buy when the time is right for them: “People need to look at properties as their homes and not short-term investments, and need to act now if the time is right for them. Historically, time in the property market is better than trying to time it.”

Dhoffer's views were shared by Steven Hargreaves, mortgage and protection adviser at The Mortgage Co: “Only hindsight will tell you when is the best time to buy or sell. Since time immemorial economists have guestimated the direction of house prices and have been wrong as much as right.”

Lewis Shaw, director at Mansfield-based Shaw Financial Services, cut straight to the chase: “If you're looking to buy a home and live there for a good chunk of time, then just get on with it.”

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9 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
On the whole, sellers need to sell more than buyers need to buy at the moment. As more properties pile up on the portals gathering dust, in what is a stagnant market, vendors will have to further reduce their asking prices to compete for buyers. Many buyers at present see mortgage rates and house prices as too high and feel that both will hopefully fall over the next 12 months and so are sitting on their hands. So perhaps fortune will favour the patient.
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Graham Cox
Director at Bridging Hub
Unless you really have to, there's very little incentive to buy now when it's almost certain that property prices and possibly mortgage rates will be lower in six months' time. Property values right now are falling sharply in my opinion. But you just won't see it reported for several months.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
I have a friend who waited in 2016 but the time wasn't right with his job. Then he waited again in 2018 because the time wasn't right with Brexit coming up. Then he waited in 2020 because the time wasn't right with Covid. He is currently waiting because the time isn't right with interest rates. If he had moved in 2016, he would have saved thousands and thousands in rent and have a good amount of equity in his property.
Fortune favours the bold.
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Darryl Dhoffer
Founder at The Mortgage Geezer
The current market feels like the ultimate Mexican standoff. You have homeowners who want to upsize and are waiting for prices to fractionally increase to get more for their existing properties, but can't see suitable properties available, and you have buyers waiting for house prices to drop thinking they will reduce even further. The fact is, if you are selling or looking to buy, then it's all relative. People need to look at properties as their homes and not short-term investments, and need to act now if the time is right for them. Historically, time in the property market is better than trying to time it.
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Simon Bridgland
Director at Charwin Private Clients
Amid the current lull in purchase activity, buyers will win. If vendors are waiting, it doesn’t mean they don’t want to move, more that they have simply delayed it. When sentiment returns for them, it will return for all other vendors, too, causing an influx of property onto the market. A healthy supply means fewer buyers per property who are less willing to pay top dollar for their next move. Locally, property is still selling, but vendors are starting to realise the fantasy figures they had hoped for are just that, fantasy. The ones selling and completing are those with a realistic price tag. Locally, agents with prices miles over the true value will of course be true to form and disappoint the vendor with the suggestion of a price reduction, but that’s only those that are overpriced in the first place.
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Jack Tutton
Director at SJ Mortgages
The property market has swung from a strong sellers' market where people were achieving offers well over the asking price to the complete opposite in the space of 18 months. We are seeing a lot of prospective buyers holding off as they believe that they will get a better deal by waiting for both house prices and interest rates to fall. The issue with this tactic, as we saw when mortgage rates increased sharply after the mini-Budget last year, is you cannot predict the future and you cannot ensure that you will get a better deal.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
Only hindsight will tell you when is the best time to buy or sell. Since time immemorial economists have guestimated the direction of house prices and have been wrong as much as right. During the first lockdown in 2020, most economists said property prices would fall by as much as 20%, however in 2020, property prices increased. Recent drops in interest rates will help first-time buyers.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
At the coalface, it seems there are still plenty of people wanting to move house for all the reasons they always have. Families, jobs and everything else keep on changing as they always do. The problem the market faces is that, after such a relentless period of upheaval, people want to wait and assess the lie of the land but now we seem to be in a period of relative stability. With no more nasty shocks around the corner hopefully, things seem to be getting steadily busier.
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David Robinson
Co-Founder at Wildcat Law
Finances will continue to drive the market into next year, or should I say lack of finance. Those who may have moved to larger houses are currently sitting it out to see how far their existing mortgages rise and the impact of price rises on their monthly bills. This has removed supply from lower down the market where first-time buyers are already struggling to find suitable affordable properties. I can't see any signs that the stagnant market will change for some time yet, unless the government introduce new liquidity in the run-up to the next General Election.