Is now a good time to buy a property? (And if not now, then when?)

The pressing question on many aspiring property buyers’ minds: Is now a good time to buy a property? 

Buying a property is a major decision, one that requires careful consideration and analysis of various factors. With the current economic landscape and fluctuating market conditions, it’s natural to feel uncertain about whether now is the right time to make such a significant investment. 

As of October 2024 the average UK house price is £292,059, up 3.4% on the year. Berkhamsted in Hertfordshire saw property values rise by £24,500 in a year, that’s £2,041 a month. Regional variations like this are a reminder that location is key to property investment.

When we spoke to our online community of women in 2025, 32% said they believed people could still buy property despite the current market conditions and inflation. Meanwhile, 25% felt it was not the right time due to rising costs, and 43% remained unsure, highlighting the uncertainty in today’s economic climate.

Today we’ll dive into the conversations stimulating the debate surrounding property investing and ownership, as well as the pros and cons for both avenues to help you make an informed decision.

Why you may be questioning if it’s a good time to buy a property:

Rising interest rates

Whether you’re looking to buy a property to own or as an investment, you’ll find you face similar risks in today’s economic climate. The most common is the rapid rise in interest rates. 

The Bank of England’s base rate is 4.5% which has pushed up mortgage rates. This will have a big impact on homeowners, especially the 740,000 people who took out 5-year fixed-rate mortgages during the pandemic. As these come up for renewal in 2025 many will face big increases in their monthly payments.

Interest rates are raised for various reasons, including when inflation is too high to discourage people from borrowing, so they are more inclined to save more and spend less, and ultimately help to decrease inflation. As of December 2024, the UK’s Consumer Prices Index (CPI) inflation rate decreased slightly to 2.5%, down from 2.6% in November.

In the meantime, for mortgages, it means that the amount you pay back monthly is higher today than it was in previous years. Mortgage rates have increased on average by 5 times over the last 5 years.

Do you stick it out?

If you’re in a position to buy a property, this can be a question racing through your mind when deciding if it’s a good time to buy a property. 

Do you take the leap and step into a new chapter in your life? Or do you wait to see if you can get a better deal in the future? 

While timing the market perfectly is nearly impossible, it’s crucial to evaluate your personal circumstances, financial readiness, and long-term goals. For example, if your goal is to invest in a property for capital appreciation, your decision will differ from someone who is looking to live in their property.

Evaluating the pros and cons of buying a property

Pros:

• Long-term asset appreciation: Historically, property ownership has a history of being a good long-term investment. While recessions may throw a curveball, properties tend to bounce back and rise in value over time.

• Hedge against inflation: Tired of inflation eating up your hard-earned cash? Property can act as a hedge against rising prices. When inflation strikes, property values often rise, too, which can give you a shield against the eroding effects.

• Rental income: If you’re buying a property for investment purposes, you can generate rental income. In times of economic uncertainty, rental demand may increase as some individuals opt to rent instead of buying homes. This is what we are seeing at the moment, rental prices have increased dramatically which is good for landlords. Rental income can provide a steady cash flow and help offset expenses such as mortgage payments, taxes, and maintenance costs.

• Diversification: Adding property to your investment portfolio can be like adding a superfood to your salad – it can give it a boost in the right places. By adding property to a mix of stocks, bonds, and other assets, you spread your risk across different investment types, reducing exposure to any individual asset and potentially reducing overall risk.

• Potential for leverage: Property gives you the opportunity to benefit from leverage. By taking out a mortgage (i.e. borrowing money), you are able to own an asset with some of your own money (the deposit). But also, largely with someone else’s money (the banks). This means that when property prices rise, you not only earn a return on the money you put in, but you also earn a return on the money the bank lent you. I.e. you’re making money off the bank’s money.

• Personal satisfaction: Owning property isn’t just about the potential financial returns. It’s about achieving big personal goals, whether it’s embarking on a new adventure or building long-term wealth. You are allowed to revel in that satisfaction. 

For those who are renting, private rents in the UK are up 9.0% in the last year, a strong and competitive market. This may make buyers think about whether renting or buying is best for them.

Now that we’ve covered the pros, it’s essential to consider the cons and risks as well. 

Cons: 

• Value fluctuations: During a recession, property values may experience significant fluctuations, making it challenging to predict and potentially affecting your investment’s value. If you have to sell in such a downturn then you may lose money.

• Affordability challenges: High inflation and interest rates can make it harder to afford a property. Rising prices and borrowing costs can squeeze your budget like a vice, making it harder to afford that dream property or investment project. 

• Economic uncertainty: In today’s climate of recession and high inflation, the clouds of economic uncertainty loom overhead. Job markets become a jigsaw puzzle, and financial instability adds an extra sprinkle of anxiety which can impact your ability to make mortgage payments and maintain ownership.

• Maintenance costs: Owning a property is like having a secret affair with maintenance and repair expenses. They can pop up unexpectedly, like an uninvited guest, especially during economic downturns. When you own a property, you also marry unexpected maintenance bills. 

• Limited flexibility: Commitment can be a beautiful thing, but buying a property locks you into a long-term relationship. Yet, life has a habit of surprising us! Changing circumstances or job-related moves can leave you with a conundrum. Selling during a recession can feel like a high-stakes gamble.

• Tax Implications: As with all investments, you should consider what taxes you’ll have to pay as this will have a direct impact on the returns you could make. You could be liable to pay Income Tax, Stamp Duty Tax and Capital Gains Tax depending on your circumstances.

So when is it a good time to buy a property?

The answer is it depends. It depends on you and your personal circumstances.

Deciding whether now is the right time to buy a property requires a thorough assessment of your personal circumstances, financial readiness, and market conditions. While high-interest rates and the uncertainty of timing the market may pose challenges, it’s important to remember that property investment is a long-term endeavour. By conducting diligent research, seeking professional advice, and aligning your goals, you can make a well-informed decision that suits your individual needs.

On the regulatory side, the authorities are considering relaxing mortgage rules to make homeownership more accessible. Proposed changes include relaxing financial stress testing and re-assessing affordability criteria. This could be a lifeline for first-time buyers looking to get on the ladder.

Propelle does not provide investment advice. If you are unsure about anything, please seek financial advice from an authorised advisor. Your capital is at risk.

Conclusion:

Looking ahead, the Royal Institution of Chartered Surveyors (RICS) says 53% of estate agents expect house prices to rise in 2025. So, despite the challenges of growing confidence in the market, it might be a good time for buyers to plan ahead.