Homebuyers are using delaying tactics in the hope house prices will fall, research from Alliance & Leicester (A&L) Mortgages reveals.
One in five people admit they are waiting for house prices to come down because they feel property is currently overpiced.
But despite this nearly three quarters (71%) say prices have increased while they have waited. On average the amount a property rose while homebuyers pondered their decision is £33,689 over three years and ten months. Almost a fifth (19%) of them say the value of the property they had their eye on went up by over £50,000, says A&L.
Homebuyers who waited over five years have lost out even more – as the average house price five years ago stood at £101,550 compared with £189,852 now – an 87% increase.
Currently 78% of people think properties are overpriced – and 15% are waiting for what they hope will be a drop in prices. Three quarters of this group (76%) are prepared to wait over a year and of these, a third (33%) are prepared to wait over five years.
Stephen Leonard, director of mortgages at A&L, says the research highlights some homebuyers are waiting to see if house prices will fall but that it remains to be seen whether doing so will pay off.
Leonard says: "Delaying tactics signify that homebuyers are being cautious about the property market and are considering their choices carefully before leaping in. There are various ways that homebuyers can get a foot on the ladder, part of that decision is choosing their mortgage deal carefully.”
There are those who still bought a property, rather than waiting, despite their belief the housing market was overpriced, says the lender. A third (29%) say the main reason they didn’t wait was because they needed to move and had no choice but to buy.
Just over one in ten (11%) of those who did not wait before buying a property say they still saw a considerable rise in value despite buying their home at what they felt was the ‘top of the market’.
The research also suggests 29% of homeowners feel house prices will fall soon, while over half (55%) believe they will not. Those in the East of England think further rises are likely (63%) while those in the West Midlands (37%) think property prices will fall.
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