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To buy a house in the current economic climate

(45 Posts)
Allinadaystwerk Tue 30-Jun-20 08:15:34

Would you buy or are you buying a house right now? Or do you think its sensible to wait until things settle down?

OP’s posts: |
louisemallard Tue 30-Jun-20 08:17:18

It depends really. What’s your current situation?

Elouera Tue 30-Jun-20 08:18:46

We just have!

fedupandlookingforchange Tue 30-Jun-20 08:19:25

Prices could drop but it'll probably only be temporary. It depends on if you're in a high demand area, if you are they could rise if the impact of covid 19 is minimal.
If prices do drop there maybe fewer house on the market to choose from,
If you are buying to live in for a long just buy when you see what you want

ThroughThickAndThin01 Tue 30-Jun-20 08:22:25

If it is to stay in for a long time, I’d buy now, if you have job security.

Turnedouttoes Tue 30-Jun-20 08:23:06

I’m interested in opinions on this too. Prices where we are seem to have actually gone up a bit since pre-lockdown and there’s loads of houses on the market. We were originally going to be moving next year but I’m wondering if we should look to buy a bit sooner if prices do dip at some point

notheragain4 Tue 30-Jun-20 08:25:43

If you have at least a 15% deposit, relatively secure job that you think can ride this out and fix for the long term then I would move. I personally wouldnt hang around for prices to drop as you don't know how much lending will be available, unless you have a very large deposit and squeaky clean record. We are upsizing this year, need a bigger house, but have very secure jobs.

Allinadaystwerk Tue 30-Jun-20 08:27:22

Thanks for the replies. I'm in very expensive rental and sm able to buy due to divorce settlement. I will have buy a lesser house on the outskirts of the expensive area I live in now so a drop in 'standards' but mortgage will be much cheaper than rent and, it will be my own safe haven. I'm just a bit scared I suppose. Dont want to make a bad decision.
I'll live in it for about 5 years and would like to make a bit from it. Negative equity would be a financial disaster

OP’s posts: |
Allinadaystwerk Tue 30-Jun-20 08:34:23

I have decent deposit. Permanent but part time job. Prospects to earn more are ok but would not have to due to family low mortgage payment.

OP’s posts: |
CreditCrackers Tue 30-Jun-20 08:36:11

Do it if you can. It'll be harder than before because you're likely to have a lower multiplier and need a higher LTV - but if you have the deposit and the income then I don't see any reason not to.

InMySpareTime Tue 30-Jun-20 08:36:51

If you overpay you're mortgage by paying as much as your current rent each month, negative equity won't be a problem in 5 years.
If house prices go down, then not only your house but also the house you're buying will be cheaper. It's the same ladder, but all the rungs get lower and closer together IYSWIM.

Allinadaystwerk Tue 30-Jun-20 08:41:26

Hmmm food for thought. I will not be able to overpay the mortgage until I earn more. I see the logic in if my house goes in value down so will others. I think I'm going to bite the bullet and take a risk. Prices do seem higher than before lockdown in my area too

OP’s posts: |
CherryPavlova Tue 30-Jun-20 08:52:28

Our son is reaching completion. His flat sold on third viewing, within two weeks of going on the market.
The estate agent said there was activity around first time buyer properties as lots of people had decided they did want to move in together having been forced apart and a lot more were separating and needed the smaller places when they moved out.

The places he looked at hadn’t seen a price drop. He did get a very good mortgage deal though. In part because of larger deposit due to equity from flat but also because there are good deals around.

Our daughter has had her house revalued this week, as they want to extend before considering babies etc and it had increased significantly from when the purchased two years ago. It means their mortgage has been changed to a much lower rate and monthly payments are about £175 less, despite being a larger amount over the same time.

BeanieBart Tue 30-Jun-20 08:54:40

We are. We're currently looking and have just had our AIP from the bank for our mortgage.

I don't see why not, we both have secure jobs, plan to stay in any house we buy for at least 4-5 years and have a good deposit.

BeanieBart Tue 30-Jun-20 08:57:17

Ps I'm not entirely convinced by all this 'you have to have a huge deposit to buy at the moment' scaremongering either.

We got 3 AIPs, two with a 10% deposit and one with a 5% deposit!! We have more than that to put down but it just shows the deals are still out there.

notheragain4 Tue 30-Jun-20 09:04:59

@BeanieBart our buyer is buying on his own but couldn't get a mortgage with 10% (or at least one he was happy with- it could be he wasn't happy with the rates for all I know) so he's had to go up to 15%, I'm not sure if the fact he's on his own and lending criteria has tightened was an issue. He had an AIP for 90% but he's needed to go to 85%. 50% of people with an AIP last month weren't accepted for a mortgage. It's very hard to predict.

bigdecisionstomake Tue 30-Jun-20 09:10:06

Looking at it from a different perspective - I was speaking to an estate agent about selling a property last week and his advice was either to put it on the market now or if we couldn't do that in the next few weeks to leave it until next spring. He said the market is very buoyant now and prices holding/rising but in a few months we'll have redundancies as the furlough scheme ends, Brexit and Christmas which will cause things to stagnate a bit and prices to dip so best then to leave it until April of next year when things will start to look up again.

From a buyer's perspective that would mean a lot of choice currently but higher prices, or alternatively if you wait a bit, the possibility of either picking up a bargain in a couple of months or not being able to find very much if a lot of people withdraw from the market again and sit tight.

That all depends if his evaluation of current market conditions is correct of course...

jimmyhill Tue 30-Jun-20 09:34:55

I'll live in it for about 5 years and would like to make a bit from it. Negative equity would be a financial disaster

Are you mad

LellyMcKelly Tue 30-Jun-20 10:06:39

If you find a house you love, and if you can find the ‘worst house in the best street’ where you can add value without it costing the earth then go for it.

recycledbottle Tue 30-Jun-20 10:26:42

If you are only planning to live in it for five years and need positive equity then it is much more risky.

Zenithbear Tue 30-Jun-20 10:50:39

Yes I would. I have bought in previous so called 'unsettled times'
There is never a perfect time.
Just assuming you are buying with a 25 year mortgage. Over the next 25 years that you have that mortgage do you expect there not to be any personal, UK or worldwide financial ups and downs?

Longdistance Tue 30-Jun-20 11:16:03

We’re on the market and looking. Only went on last week, but we’ve been actively looking. We want to move to another town, not within my own town. I have outgrown my hometown. Time to move on.

Didyousaynutella Tue 30-Jun-20 11:29:26

Yep but I wouldn’t over stretch myself. Interest rates will probably be sky high in ten years time. I am planning on overpaying my mortgage as much as I can in the upcoming years.

mindutopia Tue 30-Jun-20 11:31:06

We are in the process of buying right now (offer made pre-lockdown and hope to finally exchange and complete in the next month or so). I think it depends on 3 things: is the house the sort of house you wouldn't find in a year or two for the same price? do you plan to live there longterm such that you could cope if the economy tanks for the next few years? is your income secure?

The house we are buying is very unusual. We have very specific requirements related to both the house itself and land and commercial premises all in the same property. We've been looking for years. We found one, viewed it the week it came on the market, made an offer the following week after a 2nd viewing. We didn't think we'd find something that ticked all the boxes again easily.

We also plan to live there longterm at least 15-20 years. So what the economy does in the shortterm isn't really too much of a worry. We plan to add value and it will go up in value with house prices over time. I'm not worried about that.

Our incomes are secure. Actually dh is self employed and hasn't been able to keep up with all the extra clients that have come in during lockdown. My contract will be extended for at least a few more years as well.

Assuming you are in a good position and you aren't looking to turn it around and sell it in the next few years, I can't see why you wouldn't. Particularly if you can get in there and make an offer now post-lockdown. We definitely would have gotten a better deal if we had waited (obviously hindsight is 50-50), but we didn't really know in March what life would look like now. But if I was offering now, I think we could be a bit more cheeky with the offer.

VenusClapTrap Tue 30-Jun-20 11:32:01

I’m in the process of buying the bungalow next door for df. We are buying it jointly, for cash. We were a bit nervous about whether this is a good time to buy, but it’s an opportunity to have him next door where I can keep an eye on him and he can see his grandkids, and it simply won’t come up again.

The market here seems to be going nuts at the moment. Another bungalow nearby sold for over asking price within days of going on the market. Fortunately the one next door isn’t as pretty as that one so we haven’t had to deal with a bidding war!

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