Can someone wiser than me explain what will happen with the housing market?

[buddhasbelly]

We're finally at the stage where we can start looking but there's very little on the market - we're very lucky in that we don't need to move right this second.

What I'm worried about is that whilst interest rates won't go anywhere near as high as the 08 crash (or so twitter tells me) does the cost of living increases not mean that many people will now struggle to pay their mortgage regardless of interest rates? Or am I being daft?

I don't want to buy if this is the peak before a fall but will there even be a fall in house prices if the interest rates don't go crazy? Will prices just keep going up and we're better to buy now?

In all of the above I feel very worried for everyone going forward paying for day to day life. I just don't want to make the biggest purchase of our lives right now if we're teetering on the edge of a crash.

Can anyone explain what will most likely happen and if its better to wait or not?

In our area new builds have gone up in price by about 40k. I'm in Scotland and am aware scottish government policy is going to require older builds to become more energy efficient which will have its own costs involved. It's all a total minefield.

They're saying that FOMO (fear of Missing Out) is being replaced by FOPTM (Fear of Paying Too Much).

Generally, interest rate rises and inflation will lead to easing of house prices. Price growth will stop, rents will plateau. There'll be mortgage defaults at the first home buyer end but due to far better bank regulation it won't be anywhere near as awful as the 2007/08 financial crisis. I wouldn't expect prices to fall: investors won't start exiting the market because rents will remain good (housing supply remains short).

Most people put paying the mortgage above everything else and will cut back in other areas first. So yes almost everyone will be feeling the squeeze, lots of people will be really struggling but I don’t know how many will actually default on the mortgage. And people need to live somewhere, if you’re not buying you’re renting and someone still owns that property. I wouldn’t be surprised to see prices staying fairly stable as people find that they don’t have the money to upsize but as you’re finding there’s not a lot out there and it’s definitely still a seller’s market. You’re also primarily buying a home not making an investment. If you can buy something that will suit you at least medium term i.e. not a 1 bed flat if you want kids in the next few years, and not over stretch to do it then I don’t think you’d be making a bad call.

Thanks so much both.

As I say we're very lucky in that we don't need to move right away but we're keeping an eye out / I look probably far too often for anything that comes up that suits our needs.

We're looking at all areas in our region but yes very little coming on unless you're in the much higher price bracket (not anywhere near as high as some regions but against regional salaries are well out of reach for most)

I should've added we're in a now popular tourism area so when we've seen reports prices stabilising nationally it's maybe not holding true for here. But on the flip side, if we'd bought last year we may have gone for something that wasn't fuel efficient so there's no point lamenting the prices just now. Just hopeful that things will stabilise here and we can get a long fixed rate mortgage, that's the but that's pushing us to buy sooner rather than later, if long term fixed rate mortgages start to disappear.