- A fifth of people delayed buying a property because of high prices
- Homebuyers who delayed, saw prices rise by over £33,000 on average
One in five (21%) people admit that they play the waiting game because they feel houses are overpriced. However, nearly three quarters (71%) say that prices increased whilst they have waited. The average amount that a property rose while homebuyers pondered their decision is £33,689 over an average wait of three years and ten months(1). Almost a fifth (19%) of them said that the value of the property they had their eye on went up by over £50,000.
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(2) now - an 87 per cent increase.
Currently 78 per cent of people think that properties are overpriced - and 15 per cent 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 Alliance & Leicester, said: "The research highlights that some homebuyers are playing the waiting game to see if house prices will fall. In recent years the majority of those who waited to see if house prices would fall before, found that they had waited in vain since prices rose on average by £33,000 whilst they waited. It remains to be seen whether waiting will pay off going forward."
There are those who still bought a property, rather than waiting, despite their belief that the housing market was overpriced. A third (29%) said the main reason they didn't wait was because they needed to move and had no choice but to buy.
Over a tenth (11%) of those who did not wait before buying a property said they still saw a considerable rise in value despite buying their home at what they felt was the 'top of the market'.
Stephen Leonard adds: "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.
"At Alliance & Leicester we assess how much borrowers can realistically afford to borrow, based on their individual financial circumstances, not just their gross income. This flexible and responsible method of lending should give a much needed boost to those looking to take their next step in the housing market."
Other key findings reveal:
- 29 per cent feel that 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.
- Of those who believe that house prices will fall in the future, a third (33%) have held this view for a year. In this time, house prices have increased by seven per cent(2).
- Those in their 20s are most likely to use delaying tactics and hold off from buying a property because of they think the market is overpriced (39%).
