Is now a good time to buy a property?

Is now a good time to buy a property?

This guide will help you understand if it’s a good time to invest in property despite the soaring mortgage rates.

February 6, 2023
2 min read

With interest rates increased to 4% in February and mortgage rates remaining considerably high, a lot of people are wondering; is it a good time to buy a property in London? UK house prices have dropped for four months now and the decline is projected to continue to drag on as long as the mortgage rates stay high. This fact presents an ideal opportunity for property price negotiations. Indeed, it is the right time for buyers to negotiate and push the price down. With fewer buyers on the market, more landlords who sell compete.

High mortgage rates can be offset by securing a competitive price for your property. Prospective home buyers and renters should ask themselves ‘why should I pay rent and effectively pay someone else’s mortgage when I could pay my own’? Something else that should be considered is the capital appreciation you could benefit from after you buy a property. London is a global metropolis for investments, attracting hundreds of buyers and investors from all over the world. The demand for properties has typically remained high with some glum spells. Therefore, chances are that a homeowner could get a decent capital appreciation when they decide to sell.

Further, we need to stress that this period is a prime time for cash buyers. Cash buyers have the opportunity to buy now and release equity later on when the mortgage rates decrease. With this, they can fund repairs or improvements, pay off debts for renovation or even make a deposit for a second home or a buy-to-let investment. This type of mortgage is known as an unencumbered mortgage. With this mortgage, you can release up to 75% equity (Loan To Value). Furthermore, it is a fairly straightforward process and typically applications tend to be approved.  

Therefore, buying a property today could help you benefit from low prices. You could also opt to release equity at a later time when mortgage rates decrease so you can use these funds for other investments.

All in all, it’s safe to conclude that it is a good time to buy a property. After all, the right property investments can be profitable with very low risk. As soon as the population in London remains to grow steadily (City of London population change, Census 2021 – ONS), it is expected that demand for properties will also rise.