BRITAIN’S housing market has stalled – but buyers are starting to come back, prompting a warning that some could make a very expensive mistake by assuming flat house prices mean it is suddenly a good time to buy.

New figures from Lloyds show UK house prices were unchanged in September, both compared with the previous month and the same month last year, with the average property now worth £298,441.

But there are signs that buyers are returning to the market, with new mortgage enquiries increasing at their fastest rate since February.

At the same time, mortgage rates have been edging higher as expectations around interest rates have shifted, with markets increasingly pricing in the possibility that rates could rise rather than fall.

Elliot Castle, CEO of We Buy Any Home, says the latest figures highlight why buyers should look beyond the asking price and consider the full cost of owning a home.

“Flat house prices can look like good news for buyers, but the price of the property is only one part of the calculation.

“The bigger question is what that property will actually cost you every month once you factor in the mortgage rate, bills, maintenance and all the other costs that come with owning a home.

“With mortgage rates already moving higher and expectations of further increases, someone who stretches their budget because they think house prices have stopped rising could end up paying far more over the lifetime of their mortgage than they expected.”

The mortgage trap buyers need to watch

One of the biggest mistakes buyers can make is focusing too heavily on getting the property itself at the right price while underestimating the cost of borrowing.

Lloyds’ latest figures come just days after its affordability analysis showed the gap between house prices and earnings has narrowed, with the house price-to-income ratio falling from 7.6 to 7.3 – its lowest level in 11 years.

However, average monthly mortgage repayments have risen from £1,100 to £1,157 over the past year because of higher interest rates.

And with expectations of higher interest rates putting further pressure on mortgage pricing, buyers need to be particularly careful about how much they can comfortably afford.

Elliot says buyers should therefore avoid assuming that a flatlining market means they need to rush in before prices start rising again.

“Buyers shouldn’t feel pressured into making a decision simply because they are seeing more activity in the market.

“More people making enquiries does not mean prices are about to surge, and it certainly doesn’t mean you should take on a mortgage that leaves you financially stretched.

“The expensive mistake is buying a home you can technically afford today but that leaves you with no breathing room if mortgage costs, energy bills or other household expenses rise.”

The £20k mistake that can cost you for years

He says buyers should also be wary of becoming emotionally attached to a property and allowing competition to push them beyond their original budget.

“Set your maximum budget before you fall in love with a property and stick to it.

“It’s very easy to start thinking that another £10,000 or £20,000 won’t make much difference when you’re standing in a house you really want, but those extra pounds can translate into years of additional mortgage costs.

“The market may be showing signs of life, but that doesn’t mean buyers should abandon caution.”

For anyone considering buying now, Elliot says the key is to look beyond the asking price and calculate the true monthly cost of owning the property, including mortgage payments, council tax, insurance, maintenance and energy bills.

“The fact that prices have stalled could give buyers more breathing room when negotiating, but it shouldn’t be treated as a green light to overextend yourself.

“A sensible buyer should be asking not just ‘Can I buy this house?’ but ‘Can I comfortably afford to own it if circumstances change?’”

The latest Lloyds figures suggest the housing market is currently caught between cautious buyers and underlying demand, with the outlook likely to depend heavily on consumer confidence and the path of borrowing costs.

For buyers, that means a flat market may offer opportunities – but only if they avoid turning a supposedly affordable purchase into an expensive long-term commitment.