by Simon Wright

Created on: July 23, 2008   Last Updated: March 18, 2012

Most people dream of owning their own home but, for some, the dream can turn into a nightmare of negative equity, financial hardship or repossession. Buying a home is the biggest financial transaction that most of us will ever undertake, so it's important to be sure that it's the right decision. And one of the key decisions is whether to go ahead and buy a property now or wait in the home that conditions will be better in the future?

The question of whether to buy now or wait is particularly pertinent at the moment, due to two prevailing economic factors. Firstly, house prices have been falling and there have been predictions that they will fall further over the next 12 months or so. And, secondly, with world economies moving into recession there are some people who are concerned about buying now and then possibly becoming a victim of the rising redundancies and/or inflation.

Buy now if you can comfortably afford it:

It's notoriously difficult to accurately predict the bottom of the market and waiting too long might just mean that you miss out on the opportunity to buy the home that you could have afforded. In general, therefore, it's usually worth proceeding with a home purchase as long as you are confident that you can afford the required mortgage.

Falling house prices?
Let's look first at the issue of falling house prices. In recent years there has been an almost relentless increase in property prices and this has made it increasingly difficult for young people to get onto the property ladder. Indeed, it has contributed to the sub-prime problems in the US as mortgage holders have overstretched themselves in their desire to own a home. The fact that house prices are starting to come down, then, is great news for potential first time buyers and the fact that they are expected to fall further means that in some circumstances it may be a prudent decision to hold off for a while.

However, there are some reasons why delaying may be the wrong decision. You can't be certain that prices will be lower in six or twelve months, whereas you can assess whether you can afford a property now. You may also face less competition for your dream house if you strike whilst others are dithering.

There are also other considerations that lend urgency to our desire to buy a house. Maybe you've just got married, or are about to have a child, or the lease on your rented apartment is about to run out. Sometimes, we simply don't have the luxury of picking and choosing when we buy.

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