engine - 12:01 pm on Nov 29, 2007 (gmt 0)

I've seen a number of these cycles over the years, and I can only speak from personal experience.

When I was young, I couldn't afford the deposit, so didn't buy. It took me almost 10 years to save real hard to get anywhere near enough for a deposit. Of course, in that time, house prices had risen, making it more difficult to get a house.

I receieved a tax rebate, as i'd been paying too much tax over a number of years, and this topped up my deposit.

I bought a property in the mid eighties before the crazy price hikes later in that decade, and into the early ninties. During that time, the property went up in value, then took a slight drop, but was still ahead of the purchase price. It's now many years later and the property is almost paid off.

At that time of the early nineties, one of our neighbours had bought their house at the peak pricing, and were hit with negative equity when the prices fell. They were unable to move, although they still had a roof over their heads. That has since well passed by and the house has risen in value taking, them well out of the negative equity trap. They were then free to move as their family grew.

The key factor, as I see it, is that you want somewhere to live, and property will continue to rise in cost/value in the long term.

As long as you can pay the mortgage, it's going to be a good move to get on the property ladder as early as you can afford it.

Prices in some areas will rise more than others, mainly due to demand. Certain types of properties will have a price premium over others. For example, flats seem to be less attractive than houses in the same area. That's a broad generalisation, of course, as it does depend upon the area, demand, jobs, schools, etc.

Do your research, look at what you want from your house, and see it as a long term home, not an investment.

I don't know if prices will fall, however, there is likely to be less pressure on increases, and prices may remain relatively stable while the period of uncertainty remains.
IMHO

Obviously, with anything like this you must consult the professionals and take legal and financial advice.