Now could be one of the best times for first time buyers and homeowners upsizing to buy a new property, despite rising mortgage rates, experts say.

House prices fell by 3.4 per cent in the year to May, at the fastest pace since July 2009, data from Nationwide found, with the average property price now standing at £260,736.

As a result, those looking to enter the market could be in a good position to make an offer, before mortgage rates are expected to increase later this year when the base rate is predicted to reach as high as 5.5 per cent.

Chris Sykes of brokers Private Finance said his brokerage has had many conversations with first time buyers over the past few weeks planning to start the process of buying a home.

“It is definitely a good time to buy for the first time buyer demographic. With rental prices skyrocketing in the last six months, people are now considering buying again to have the security of their own home with the pricing also looking more attractive.”

While rates are nowhere near where they were before the mini-Budget last September, with the current average two year mortgage rate at 5.45 per cent, they are still much lower than directly after when rates rose to as high as 6.65 per cent.

Property prices are also still predicted to drop even further, brokers say.

Nicholas Mendes of brokers John Charcol said: “After the pandemic, house prices shot up, but they’re coming back down now. We’re still likely to see another house price drop which means buyer deposits will go further.

“While prices have dipped for now, in the long term they will rise again, so if you see a property you like and can afford, it’s worth going for it.”

It is also likely there will be more homes on the market soon, Richard Donnell, the chief executive at Zoopla, told i.

“More people are retiring early after the pandemic and older homeowners whose children have flown the nest will likely be looking to sell up. There will be homes that need doing up and therefore, first time buyers can get a good deal if they’re willing to renovate before selling on later for a higher price.”

He added landlords are also selling up, with these ex-rented homes having an asking price that is 25 per cent lower than ex-homeowner properties.

Research from Zoopla also shows sellers are accepting 4 to 5 per cent off their asking price on average, meaning there is room for negotiation on the part of both buyers and sellers to get a good deal.

Donnell added: “Most sellers have been in their home for 20 years and will have made lots of capital gain so will be realistic when it comes to offers. There are definitely deals to be done.”

Those looking to upsize their current property could also benefit from lower prices. Even though they may get less for their existing home, they will save on a bigger property.

For example, if their home would usually be valued at £300,000 but sells for £288,000 – a reduction of 4 per cent – if the same reduction was made on a £400,000, they could buy for £384,000 – losing £12,000 on their home but getting a larger one for £16,000 cheaper.

Mendes added: “It could now be a good time for people looking to upsize. There are less people looking which means there is less demand and less chance of a price war. It’s definitely a buyers market.”

However, there is a delicate balance when looking to buy and weighing up where mortgage rates are at compared to lower house prices.

Neal Hudson, property expert, said the reality is that it is “very difficult” to time a house purchase and it will very much depend on personal circumstances.

“Buying a house takes several months so month to month price fluctuations won’t have much impact on whether you get a bargain or not. Ultimately, whether the price is up or down a few per cent may have an impact but if you can find somewhere you want to live, it could still be the right decision.”

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