You shouldn't rush to buy a property right now – here's why

With stamp duty holiday ending on the 31 March, many people will be rushing to complete a house purchase in time to take advantage of the tax relief on properties priced up to £500,000. In fact, we've recently reported that house prices have begun to decrease at least partly because house sellers who also want to buy are keen to sell quickly, even if this means slightly reducing the price.

It would seem that conditions are now ideal for anyone moving onto the next rung of the property ladder and that getting in there while you can is what you should be doing if you are to secure your dream home at a lower price.  

This actually isn't what property experts believe, however; Ross Counsell, chartered surveyor and director at Good Move, advises against hasty decisions where it comes to property:

'Many people will certainly be rushing to buy in light of decreasing house prices and before the Stamp Duty deadline on March 31st, but rushing to reach this deadline could result in you spending more money in the long run.'

Firstly, there's the potential issue with simply making the wrong choice of property, which will result in another costly move soon enough:

'It’s always best to spend time finding the right home for you and your family, and you should never rush a decision this big. If you do, it could mean a whole host of costly problems later on that you simply didn’t have time to spot during the viewing and buying process.'    

People can be very good at discounting potential problems with a property in order to convince themselves that it is 'the one', but this can result in much grief further down the line. Never buy a house after just one viewing, and if you have reservations, think it through a bit more before putting in an offer. 

Secondly, as Ross explains, while house prices have begun to come down, they currently are at a record high, which will hardly get you a good deal on a property:

'[A]verage house prices in the UK have reached a record high, at £250,457. This marks a 7.5% increase from this time last year. However, the latest figures that house prices are already starting to decrease, and we predict house prices to fall even further between now and the New Year, and especially around the end of the stamp duty holiday. So if you do buy a home between now and then, it’s likely you will be overpaying for the property.'

Finally, no one can ignore the situation with mortgages: the number of deals available is still restricted, and rates are higher than they were pre-pandemic. This too shall pass, as Ross points out:

'Mortgage lenders have also seen an all-time high in applications this year which has in turn made them even more selective to who they lend to, which again results in buyers needing a larger deposit and mortgage payments if they are to be successful in their application. This is expected to calm down after the stamp duty holiday as fewer [sic] people will be applying for a mortgage, so you might find you’ll get yourself a far better deal if you wait.'

In other words, if you do jump through all the hoops and buy now, you will save on stamp duty but likely will overpay on everything. Only persist with a property purchase if you're absolutely certain you've found the house you really want; if you haven't, it makes sense to wait a few months until the property market is calmer. 

There's no reason not to start researching your mortgage options, though; begin by using Habito's free mortgage comparison tool below.