Is now the time to buy a home?

For sale signsThe last few years have seen stagnating house prices in many areas, and falling prices in others. For those hoping to buy and saving for a deposit, it's been pretty good news, as it gives you a little bit of breathing space.

After all, if prices where you want to buy are not rising, there isn't a great rush to get on the ladder immediately – so you can spend time amassing a bigger deposit if that suits your circumstances.

However, recent reports of UK house prices being back on the up may spark some wannabe homeowners into moving a little more quickly, before they rocket out of reach again.

What's up?
According to Halifax, average house prices in the three months to April were 1.3% higher than in the previous three months. And they were 2% higher than in the same three months a year earlier - the fourth consecutive rise in this measure and the highest rate of increase since September 2010. This shows a slow but steady trend upwards.

Martin Ellis, housing economist at Halifax said: "House prices continue to pick up gradually. The relatively low level of mortgage payments in relation to income continues to provide support for the market."

Also this week economic thinktank Fathom Consulting has predicted that George Osborne's Help to Buy scheme – designed to boost the housing market and help first-time buyers onto the ladder – could force average prices up by a massive 30%.

It reckons that the average UK house price could be over £300,000 by the end of 2015, as a result of what it describes as a 'reckless' scheme.

So does this mean that wannabe buyers should get onto the housing ladder now before they can no longer afford it? Or is it unrealistic to suppose that prices will start to run away again?

Capital appreciation
A lot depends on where you want to buy. In London for example, demand has remained high over the last few years and prices have continued to rise. Indeed they are propping up the national figures.

According to LSL Acadametrics house price growth in London continues to outpace the rest of the country. Its latest house price index showed that average property prices across England and Wales increased £6,700 in the last 12 months but would have grown by just £1,117 without the input of the London market.

And things are only getting better during 2013, according to David Warren, sales negotiator at Paramount Properties, an estate agency based in West Hampstead, London.

"The London property market is extremely healthy at the moment with a 6-7% rise in prices already this year. It's a trend set to continue so it's worth buying a property as soon as you can afford to – with demand strong prices will carry on rising."

Grim up North?
Those buying in other areas of the country may not feel quite so pressured to race into the housing market.

Because while prices in London may have shot up by 9.6% in the last year according to the Land Registry, they have fallen by 5.5% in the North East and dropped by 4.9% in the North West. If you want to buy in those areas, there is an argument for hanging on, because prices could drop even further.

Giles Hannah, managing director of agency VanHan, agrees that there is a big difference regionally: "House prices continue to pick up gradually, as far as the national average is concerned. But it must be remembered that this increase masks significant regional differences. The UK as a whole is seeing modest growth, with areas such as London, Oxford and Henley seeing price rises while Nottingham, Wales and the Midlands have seen price falls.

"The overall outlook is broadly positive, however, with market confidence across the UK improving, although activity is still subdued."

Halifax's Ellis is a bit more cautious, admitting there are restraining factors affect the housing market: "Activity remains subdued by historical standards with the number of mortgage approvals for house purchases easing slightly in the first quarter of 2013. Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of 2013."

Of course, your decision to buy a home will be based on other factors aside from the economic environment. Your time of life, family circumstances and finances will all be more important drivers. But the prevailing market forces may have an impact on your exact timing – and now certainly doesn't look like a bad time to take the plunge.

As Hannah sums up: "If you can afford to buy, now is a good time to do it, particularly as mortgage availability has improved significantly."

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