A property finance expert is telling buyers to sit on their hands and not commit to purchases - as he believes today’s price bubble will burst.
Mark Hughes, a specialist mortgage advisor focusing on residential property at Pure Property Finance, says purchasers should wait until “we’re out of the current property price bubble.”
He adds: “I think it’s best that people avoid investing in property right now, especially if it’s a property that they don’t see as their forever home and they’ll want to sell in a few years. We’re currently in, what I think, is a property price bubble.
“There has been a huge increase in house demand fuelled by a number of factors; people being able to save more towards their house deposit with the lack of commuting, people wanting to move closer to be with their families, people wanting more office space in their home, etc.”
“Until the property market settles down, the best thing to do would be to make smaller renovations on a current property. If there’s any way that you can add in office space to your spare bedroom, then do that, or if you’re sick of the sight of your living room from spending too much time there, then perhaps upgrade it with some new furniture.
“This may also add value if you do still decide to sell your property in a couple of months.”
He says there is a lesson to be learned from what’s happened in China, where one of the country’s leading property companies has just defaulted on payments on a debt of over £220 billion, leading to fears it could trigger a global house price crash similar to that in the global financial crisis 2008.
Hughes says: “Nobody can predict the exact movements of 2022 in terms of the housing market, but I think it’s fair to say that if you’re currently in a home where you’re safe and financially stable, not to move just yet.
“For those moving up the property ladder, their next purchase is likely to be more expensive than their previous property, meaning more finance is needed and, in this situation, the only people that will win are the mortgage companies.
“Potentially, if you hold off selling for a few more months, you may get a few more thousands of pounds for your property, as well as the property market being more predictable.”