Many of us like the idea of owning our own homes but it can be difficult when the house prices are too high. If house prices drop, then it could be thought that this would be the best time to get a mortgage and buy a home. However, it is worth being cautious as there are both advantages and disadvantages of doing this. So, look into everything before you make your decision.
If house prices are low, then it is more likely that they will rise in the future rather than fall. However, it is important to be prepared for both options as historically there have been times when house prices have fallen a lot, for a long period of time. If this happens it means that once you buy your home, it can be worth less than you bought it for. This is a lower risk that if prices are high and likely to fall, but it is very hard to predict what prices might do. If the price does end up falling more, then you could end up in negative equity, which means that you will have a higher mortgage than your house is worth and therefore will not be able to easily move, unless you downsize, because when you sell the house you will not be able to repay all of the mortgage.
If house prices are generally low then this is different to an individual area, street or home being low in price. This could mean something else. It could be that the area is not desirable for some reason and it will be good to find out what might be contributing to the low cost of housing in that area. If you know the area well, then you will be in a better position to judge for yourself or you may know local people that may be able to give you more information. If it is a specific home then it could be down to the state of repair that it is in so make sure that you do a detailed survey to check. It may be because it is small or needs updating and these things will be obvious when you visit it. If the house needs immediate work then it can be wise to work out how much this might cost to see whether you think that you will be able to afford it.
Obviously buying hen prices are cheap means that you will get more for your money. Most people have a specific budget to spend on a home and if the prices are low then it means that you could potentially get a larger home or one in a more desirable area for the price that you can afford, compared with when houses were dearer. It is worth thinking about whether it might be better to get something below your budget though as it means that you should still be able to get a decent property but you will be able to put down a larger percentage of deposit and borrow less money on your mortgage. This could mean that your repayments will be lower or you will be able to repay it over a shorter time period. It is worth considering as it could save you a lot of money in the long term.
When house prices are lower it is normally because there are a lot of houses available for sale but not many people buying. This means that buyers are in a great position. It means that they not only have a lot of choice, but they might be able to make quite low offers on houses, particularly those that have been on the market for a long time. Buyers might be holding out for a higher price, but there is no harm in making a low offer and seeing if they take it or not. You may be surprised but if they want more money, then you can offer them something higher.
It is also worth noting that house prices do not have an impact on mortgage rates. These rates are based on the Bank of England base rate which is set according to inflation. Although buying and selling of houses has some impact on that, it will not be the only factor. This means that when house prices are low it could be that rates are either high or low. These are something that you should also consider as they will determine the cost of your borrowing. Although rates will fluctuate during the term of your mortgage, it is wise to make sure that you are aware of the rates and how much a mortgage might cost you in monthly repayments so that you are prepared and sure that you can afford it. Consider what you might eb able to afford in the future as well as now.