Uncertainty about the housing market is adding extra pressure to first-time buyers who can't decide whether to get on the property ladder.
You won't be surprised to hear that first-time buyers are getting rather confused by the conflicting signals coming from commentators on the housing market. To buy or not to buy. Are house prices about to crash or not?
According to research carried out by Skipton Building Society, fledgling home-buyers feel immobilised by indecision as uncertainty about the future stability of house prices leaves them in constant limbo.
Twenty percent of respondents say they're delaying their decision to buy because they feel confused by contradictory advice about whether or not to buy. Around two thirds are worried that interest rates will rise, leaving them unable to make mortgage repayments, as well as worrying that prices will crash leaving them in negative equity.
Some have been wondering whether to buy for up to two years and, as the research points out, the delay has backfired as house prices have soared in the meantime making it more difficult for some to raise the deposit.
However, according to Abbey National research it's still cheaper to buy than rent while the latest housing market surveys from both the Halifax and Nationwide banks still expect house prices to increase by around 10% this year in spite of earlier concerns that a dramatic slowdown and even a collapse was on the cards.
It's not surprising that would-be homeowners are in a state of flux. But the main thing to remember is that the purpose of buying a house is to make yourself a home. Whether or not it's a good investment should be a secondary consideration, as you will always need a roof over your head. The key to avoiding negative equity and the threat of higher interest rates is not to overstretch yourself in the first place and to be very careful about what sort of mortgage you select. Those offering flexible payments may be of particular interest. If you can't afford to buy without leaving yourself at least some leeway, you may prefer to wait for the crash. If it comes.
> Read the Fool's guide to mortgages.
