ASK THE EXPERT


Q. I am considering buying my first property, and I can put down a sizeable deposit – but with prices still dropping, doesn’t it make sense to wait a bit longer before committing myself?

A. I can certainly understand why you might think so. After all, if you’re not under any pressure to buy now, then why do so, when in a few months’ time it could cost you less? Besides, you are in an extremely strong position. As a first time buyer, you’re not hampered by having to sell anything yourself. What’s more, as a member of that most exclusive of clubs – first time buyers with access to substantial funds - you shouldn’t have any trouble getting a mortgage, either.

Put all that together, and it adds up to a pretty convincing case in favour of hanging on for a while.

Except, of course, for the fact that no-one can predict with any degree of certainty just how much longer prices are going to continue falling, or by how much. After all, if markets were that easy to read, everyone would buy at the bottom and sell at the top, and we’d all be very rich! Unfortunately, it tends not to work that way. Indeed, the only time you can be reasonably confident that prices aren’t going to fall any further is when they start rising again.

In any case, there is a widespread sense in the industry that prices are now pretty close to bottoming out. Add to that the fact that pent-up demand could mean that the recovery, when it does finally kick in, will be quite sudden and dramatic, and waiting starts to look like a rather risky game.

The net result of all this is that, yes, it’s certainly still possible that your property of choice might be a little cheaper in a few months’ time. But it’s equally possible that it won’t be. Indeed, it might even be slightly more expensive.

So, the bottom line is this. If you’ve already got your eye on a place, my advice would be to buy it now – before someone else does!