Have you been put off buying a property, or moving to a new one, until mortgage rates go down? With the average two-year fix now at 5.45 per cent, many are holding on for when they start to dip.

However, house prices are now also falling – by 3.4 per cent in the year to May according to the Nationwide house price index, their fastest annual fall in 14 years – which has complicated matters. Should you wait for house prices to fall further, even though mortgage rates will go up?

This is the current homebuyers’ dilemma: financial markets are now predicting that the base rate could be as high as 5.5 per cent by the end of this year, but it’s likely that house prices will fall further

Nicholas Mendes, of brokers John Charcol said: “After the pandemic, house prices shot up, but they’re coming back down now. We’re still likely to see another house price drop which means buyer deposits will go further”.

“While prices have dipped for now, in the long term they will rise again. My view is if you see a property you like and can afford and you’re planning on staying longer than five years, it’s probably worth going for it.”

One way of insuring yourself against future falls in house prices, is to buy a home you can add value to. Richard Donnell, the chief executive at Zoopla, told i, that one way of doing this is to buy a home from the growing number of people taking early retirement, who are downsizing.

More people are retiring early after the pandemic and older homeowners whose children have flown the nest will likely be looking to sell up,” he said.

“There will be homes that need doing up and therefore, first-time buyers can get a good deal if they’re willing to renovate before selling on later for a higher price.”

Landlords are also selling up, with these ex-rented homes having an asking price that is 25 per cent lower than ex-homeowner properties.

Now is also a time not to over-pay. Research from Zoopla also shows sellers are accepting 4 to 5 per cent off their asking price on average, meaning there is room for negotiation on the part of both buyers and sellers to get a good deal.

Donnell added: “Most sellers have been in their home for 20 years and will have made lots of capital gain so will be realistic when it comes to offers. There are definitely deals to be done.”

Those looking to upsize their current property could also benefit from lower prices. Even though they may get less for their existing home, they will save on a bigger property.

For example, if their home would usually be valued at £300,000 but sells for £288,000 – a reduction of 4 per cent – if the same reduction was made on a £400,000, they could buy for £384,000 – losing £12,000 on their home but getting a larger one for £16,000 cheaper.

Mendes added: “It could now be a good time for people looking to upsize. There are less people looking which means there is less demand and less chance of a price war. It’s definitely a buyers’ market.”

Chris Sykes of brokers Private Finance has pointed out that for many first-time buyers, escaping rocketing rental prices as soon as possible means for them it makes sense to buy now.

“These clients are now considering buying again with the pricing also looking more attractive,” he said.

However, there is a delicate balance when looking to buy and weighing up where mortgage rates are at compared to lower house prices.

Neal Hudson, property expert, said the reality is that it is “very difficult” to time a house purchase and it will very much depend on personal circumstances.

“Buying a house takes several months so month to month price fluctuations won’t have much impact on whether you get a bargain or not. Ultimately, whether the price is up or down a few per cent may have an impact but if you can find somewhere you want to live, it could still be the right decision.”