Those who wait for price falls wait in vain

Alliance & Leicester says that home buyers putting off buying homes in expectation of a price fall on average lose out to the tune of a whopping 3,689 if they hang on for four years.

One in five people play the waiting game because they feel houses are overpriced.

But nearly three-quarters of buyers say prices actually increased while they waited. The average amount a property rose while home buyers pondered their decisions was 33,689 over the average wait of three years and ten months. Almost 19% say that the value of the property they had their eye on went up by over 50,000.

Home buyers who waited over five years lost out even more as the average house price five years ago stood at just 101,550 compared with 189,8522 now, a price increase of 87%.

Currently, 78%of people think that properties are overpriced and 15% are waiting for what they hope will be a fall in prices. Three-quarters of this group are prepared to wait over a year and one-third are prepared to hold off buying for over five years.

Stephen Leonard, director of mortgages at Alliance & Leicester, says: “The research shows some home buyers are playing the waiting game to see if house prices will fall. In recent years most of those who waited to see if house prices would fall found they waited in vain, instead seeing prices rise by an average of 33,000. It remains to be seen whether waiting will pay off from now on.”

Some bought a property rather than waiting, despite their belief that the housing market was overpriced.

“One-third of these say the main reason they did not wait was that they had to move so were left with no choice in the matter.”