Depends on how house prices are likely to go in the medium term, I suspect they are going to continue falling for the next 12 -18 months. Effectively, buying a house is investing in a single asset – this will increase your risk in terms of probability of getting a certain return. However, this must be weighed against the low cost of borrowing at the moment and the fact it is a buyers market. If you could get credit at a good rate, fixed for x amount of time, and offer a silly low price to someone desperate to sell it might be worth it.
Personally I’d keep the money in a savings account and watch the way the market moves in the next 12 months before committing to another mortgage.