A Good Time To Buy? – As House prices stabilise.

A study by hometrack showed that last month, house prices were stable in most regions, giving more evidence that the dramatic declines in house prices may be over. However, hometrack cautioned against calling the bottom to be reached. Last week a report by Nationwide predicted house prices would not maintain a lasting recovery until next year – 2010. This was despite Nationwide reporting a 1.2% rise in house prices during May. The good news is countered by the gloomy economic conditions and continued problems in the mortgage market. The CML reported a 9% fall in the value of mortgage lending last month.

Is Now A Good Time To Buy?

It is likely that house prices will fall. But, the magnitude of the falls will be limited and not severe. 12 months ago, it definitely made sense to wait. But, not that imperative has gone. For a short while, we could see a degree of house price stability – moderate falls followed by moderate rises. It is a good opportunity to bargain hunt and if you find a good value house and can get the mortgage, I don’t think the fear of house price falls should delay purchasing.

The other issue to bear in mind is that the low base rates will not last for too long. Despite a negative RPI inflation rate, the policy of quanitative easing is likely to see inflationary pressure return in 2010. As inflation rises interest rates could pick up sharply.