Is now a good time to buy a house?

House, calculator, keys and spreadsheet on a table

(Image credit: © Getty Images)

last updated 24 March 2025

Unless you are in the final stages of the conveyancing process, it is too late to buy a house before stamp duty thresholds drop on 1 April. But with interest rates falling and affordability pressures easing, now could still be a good time to buy.

Wages outstripped house price growth last year, resulting in a “modest improvement” in affordability for buyers, according to mortgage lender Nationwide.

Although mortgage rates remain significantly higher than their long-term average, some sub-4% deals returned to the market earlier this year as interest rates continued to fall, resulting in lower borrowing costs for prospective buyers. Further rate cuts over the course of the year should loosen affordability constraints further.

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It is also possible that house price growth will slow after April’s stamp duty changes, potentially creating a good entry point for those who are considering a purchase. The market is expected to remain fairly resilient overall, though.

“The ongoing shortage of housing supply coupled with sustained demand suggests property prices will continue to rise this year, albeit at a more measured pace compared to last year,” said Amanda Bryden, head of mortgages at Halifax. For context, the bank recorded house price growth of 3.3% last year.

How will stamp duty changes impact the housing market?

Robert Gardner, Nationwide’s chief economist, said he expects to see a jump of transactions in March followed by “a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes”.

We could be starting to see the effects of this already. New buyer enquiries and newly-agreed sales turned “mildly negative” in February according to the latest sentiment survey from the Royal Institution of Chartered Surveyors (RICS), published on 11 March.

If there is a lull in buyer activity in the immediate aftermath of stamp duty changes, it could give buyers more negotiating power when putting in an offer. You could even knock a few thousand pounds off to offset the higher tax bill you will have to pay.

The good news for buyers is that there is still a decent pipeline of homeowners looking to sell. “For new listings, the latest net balance of +12% extends a run of positive readings for this series into an eighth successive month,” the latest RICS survey said.

Net balance scores are calculated by subtracting negative responses from positive responses, and can range from -100 to +100. In this instance, a result of +12% means the majority of survey respondents saw an increase in vendor instructions over the past month.

Colleen Babcock, property expert at Rightmove, said those sellers who are successfully finding buyers right now are “working hard with their agents to price competitively and present their home in the best possible light”, suggesting it could be a buyer’s market.

Despite stamp duty changes, real estate consultancy Knight Frank is forecasting house price growth of 2.5% overall in 2025. Estate agent Savills is more bullish, forecasting 4%.

Affordability is still stretched

Although affordability improved slightly last year, research from Nationwide found that the average first-time buyer was still paying five times their annual salary – significantly higher than the long-term average of 3.9 times earnings.

Meanwhile, the latest figures from the Office for National Statistics (ONS) found that the average home in England cost 7.7 times earnings in 2024 – an improvement on 2023’s figure of 8.3 times earnings, but still unachievably high for many.

“While the dial is beginning to turn on housing affordability, the fact remains that the income-to-house-price ratio has gotten worse over the last decade,” said Richard Cook, senior economics director at development consultancy Pegasus Group.

“With mortgage providers only willing to lend on 4.5 times one’s salary, it remains near impossible to get a foot on the ladder,” he added.

With this in mind, the question of when to move could be less about timing the market and more about when you can afford to buy.

Is now the right time for you?

As well as raiding their savings for a deposit or relying on family for help, prospective buyers will need to weigh up whether they can afford monthly repayments – particularly in light of rising costs elsewhere.

While the worst of inflation is behind us, cost-of-living pressures are due to ramp up again this year, with inflation forecast to hit 3.75% in the third quarter. A slew of bill hikes is also due in April, impacting energy bills, water bills, council tax and more.

Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown, says people who put homeownership above everything else can suffer.

“While they’re saving for a deposit, they may overlook the need for emergency savings, or decide to scale back pension contributions or investments,” she explains. “Even once they’ve bought, rising house prices and relatively high mortgage rates mean monthly payments can be high enough to put the brakes on their other financial plans.”

Hargreaves Lansdown’s savings and resilience barometer found that older Gen X homeowners, who bought when property was more affordable, had an average of £369 left at the end of each month once all expenses were paid for. Meanwhile, younger millennial and Gen Z homeowners had just £271. “They’re both better off than renters, but the difference is stark,” said Coles.

With this in mind, it is worth doing the maths to understand what your monthly outgoings are likely to look like once you have completed a purchase. Factor in any potential bill hikes, and plan for how you would manage if you were to experience a shock event like redundancy.

If you have accounted for these costs, have the money and are ready to go, then there is no need to hold back. But if you are unsure and feel that buying now would stretch your monthly income to the max and leave you with limited emergency savings, it is probably better to wait. You might want to build up a larger deposit, negotiate a pay rise, or wait until mortgage rates are lower.

Katie has a background in investment writing and is interested in everything to do with personal finance, politics, and investing. She enjoys translating complex topics into easy-to-understand stories to help people make the most of their money.

Katie believes investing shouldn’t be complicated, and that demystifying it can help normal people improve their lives.

Before joining the MoneyWeek team, Katie worked as an investment writer at Invesco, a global asset management firm. She joined the company as a graduate in 2019. While there, she wrote about the global economy, bond markets, alternative investments and UK equities.

Katie loves writing and studied English at the University of Cambridge. Outside of work, she enjoys going to the theatre, reading novels, travelling and trying new restaurants with friends.