To pull out of buying this house and signing up for a big mortgage

[BorneFeet]

We're stretching ourself to move up from a 2 bed to a 4 bed house.
We're ready to exchange on the sale of our house but not on the place we're buying.
Moving to a new area and would rather rent for 6 months then see than take on a huge mortgage with everything so uncertain at the moment.
DH thinks its a bad idea to have cash and better to have debt on the new house. I disagree AIBU to think it's better to pull out and rent?

Things like this are a worry www.mirror.co.uk/money/coronavirus-hitting-house-prices-peoples-21643234

If you're uncertain about the house you're buying it would be very reasonable to pull out. Selling is the hardest part of moving and not having a chain makes you a better buyer.

The last time we moved our Purchase fell through on the survey but we had a solid Buyer. So we sold and moved into a rental - fortunately someone we knew was just starting out as a landlord so we became their first tenant. This gave us plenty of time to find the house we eventually bought.

However, if you're doing this to play the market it's a gamble. You need to think about what you'll do with the cash you realise from the sale of your current house. Inflation is running higher than interest rates and the stock market is tanking (Coronavirus), so unless there's a property market crash you're losing money every month. Mortgage rates are unlikely to drop because the base rate is already so low and poor economic forecasts (Brexit) are already built in to fixed rate deals.

It's possibly not a good time to be taking on a larger mortgage. But you need to decide how much that would stretch you and work out what the true costs are of each option available.

YANBU we are renting right now between houses while we work out where we are at with things. Buying a new house is a big purchase and it's not just the money, you have to live with it until you sell it so it's important to be sure. :)

Thanks Dog, I'm 80% doing it because im uncertain about the house and area.

Not really trying to play the market, job worrys are more of a concern. I would ideally want to get a house with a little mortgage, not a huge one as this would be.

It doesn't make sense to sell a 2 bedroom house to then rent a 2 bedroom house. I can understand why you're hesitant to take on a 4bd with a bigger mortgage.

Any chance you could stay where you are for the moment, maybe for another year?

It's a sensible position @BorneFeet but not entirely without risk, you're just exchanging one set of risks for another. As long as you understand that, you've just got your husband to convince.

A good starting point would be to have a look at what rental properties are available, if they are any you like, and what they cost. Living in a rental is quite a change to living in your own home. So also have a think about what that would mean - can you live with a rental garden and someone else's ideas on decor, etc.?

Ca it's moving to a new area that we need to do by the end of the month.

Thanks dog, totally agree it's exchanging risks. We've never really rented before but got some booked in for tomorrow. Fingers crossed, I'm pretty certain I want to pull out and spend more time getting to know the area and being certain on the house, hubby is the opposite!

New article from the guardian that say the Halifax are worrying about house prices www.theguardian.com/business/2020/mar/06/uk-house-price-recovery-at-mercy-of-coronavirus-warns-halifax

UK and worldwide Markets have been declining at a rapid rate over the past few weeks, US fed just made a massive emergency base rate cut, its not looking good tbh. You only have to type in recession into Google and it brings up loads of recent news articles on it.

If you sell and buy at the same time though the market is relative. In my opinion I never try and beat the market. Chances are interest rates will rise so there is an argument for locking it in now on a new home.

However OP your hesitation seems more about the area, in which case maybe take your time.

Thanks jimmy, that's what I'm thinking.

Agree picking bottoms in the market is risky, that's not what I'm doing its just the virus is the final straw. If interest rates rise house prices will probably go down more, I can't see them rising seeing as the US just dropped them.

The other thing about a slowing market is people are more reluctant to sell.
If you've fallen for a house Id proceed.

There is that, although death, divorce, job moves and other forced sales will keep things ticking along. But no I haven't fallen for it, it's just an it'll do

Then dont bother OP...bide some time, good luck!

Thanks, I think we're going to rent for 6 months or at least that's what I'm trying to go for