The recent economic crisis has shaken confidence in the property market, and it is still too early to see if there will be a recovery or not. Prices have certainly dropped from their highs of five years ago, although that said, they have not bottomed out to 1990 prices. Thus, it is difficult to see which way the market will go right now.
London property and real estate in particular has taken a hard hit, but arguably, this is because many of the houses were and have been overpriced for quite some time. As with all markets, a correction was due, and this is it.
So, when is the best time to get back into the market again, especially for first time buyers? This is a hard question to answer. The biggest problem at the moment, is that banks are simply not lending people money as easily as they were before. Some are even asking for a fifty percent deposit, which on a one hundred and fifty thousand pounds property, is quite a significant sum!
This reluctance to lend money could in fact start to have a negative effect on the market, and if houses do not start selling, then people will drop their prices. Thus, the overall average price of houses will drop.
At the moment, the recommended advice is to wait and see. Being patient for a year or even two may help to save a lot of money in the long run, especially if house prices drop further.
