AIBU to considering stretching myself to buy a house right now?

[worriedwellworrier]

I can’t decide whether this is a mad plan or now or never. I want to move. I have seen a house that will double my mortgage, it’s affordable but obviously I will have far less spare cash than I do now. DH is 50 so I feel it’s now or never to flex up to a bigger house. My job is as safe as it can be, although nothing is guaranteed, I’m in the NHS.
The house I’m keen on has come back on the market post lockdown after the original buyer pulled out. It’s on for the same price as prelockdown (we are in a popular area).
I’m reading so much about the depression we are about to enter, is this total madness to consider flexing up to a bigger house? Is anyone else doing the same?

To add, DH is self employed and we don’t rely on or consider his income, I’m the main bread earner. He’s not earning at the moment due to lockdown.

Put a low offer in and see what they say?

Do you need the space? Growing family?

What do you want more, a bigger house/garden with DP or spending your money on going out or holidays over the next few years or whatever you like to do for fun? It's all about what you see quality of life as being.

I would wait. As you suggest, we're on the brink off the biggest financial disaster in modern history. Unfortunately I would guess there will be an awful lot of distressed sellers by this time next year. If you keep your job and still have equity for a decent deposit you'll be able to do much better then than you can now.

It’s more the area we want to move to rather than the bigger house, the house is slightly bigger that what we have now but the higher price reflects the location.

Are you likely to be able to sell yours?

My parents did this in the 80s. Stretched themselves to get a bigger house and had a big mortgage with both of them working full time and overtime. Then the economy tanked. The interest rates went up from 9 to 15% and they were in negative equity so could not even sell up to get out of it.

We did this at the beginning of the year. Went from no mortgage to a mortgage for a driveway and a garden.

Vv glad we did.

Plus points
We are both in secure jobs (as much as any job is).
Mortgage rates are ridiculously low at the moment
I have a final salary pension that will clear remaining mortgage when I retire.

I don’t think it’s a bad time to buy a house.

I am so glad we moved from where we were to were we are for lockdown. Old house was v neighbour overlooked....and no garden.

Perfidy that’s good to hear, neighbours one of the main reasons for us moving too- we are so overlooked.

OP can you share a little more. Without more information it’s very hard to assess true risk.
What is your household income, or if you don’t want to share the exact number, what is the ballpark, how much is your current mortgage and how much would would new mortgage be? What would be the term of your mortgage?
It may actually make a lot of sense to buy at this time because uncertainty could mean that prices have hit rock bottom already for those who want to sell. Those that don’t want to reduce price may choose to not sell at all so even in a recession house prices may not fall if supply dries up.

Those that don’t want to reduce price may choose to not sell at all so even in a recession house prices may not fall if supply dries up.

House prices will only fall if the supply-demand balance shifts towards supply. Large scale job losses would probably lead to a lot of forced sellers who must take whatever price the market will bear, and demand drying up. Some people in the buy-to-let sector may also have no choice but to sell.

As a buyer you are unfortunately needing to make a call one way or another on a highly complex and currently unpredictable market.

Personally I wouldn’t because the housing market is likely to be going through a downturn.

sst1234
I’m a high earner, high enough to lose my entire tax free allowance. Current mortgage is 16% of my take home income, new mortgage about 35%.

Large scale job losses will not necessarily mean over supply of houses. It is not that simple. It depends on a load of other factors, govt intervention for one, fiscal stimulus etc. Why did house prices recover so quickly after 2008 while the recession lasted for a few years longer. Quantitative easing. The state can choose to intervene in a number of ways to stabilise the economy. We just don’t know if it will.
This is why, OP should not listen to over simplistic advice and share a bit more info for an informed risk based opinion.

sst1234 thanks, see post above for more info

35% is certainly high. Depending on the desirability of houses in your area and average time to sell, I would sit tight until sept and see what happens. If that mortgage to income value was lower than I would have made the move now - subject to a hard nosed negotiation with the vendor of course.

I agree @sst, but the original poster's personal circumstances won't affect whatever fiscal/monetary response comes from central government to support asset prices, or whether any policy will work. I would only be buying a house now if I thought prices were due a bit of a hike.

Do you have any other big expenses - school fees, childcare etc? Do you have a decent level of savings (beyond what you need for the house) just in case? Do you currently have a big surplus each month?

I say sept because people cannot wait to move forever and the supply picture becomes much clearer. If people who don’t need to sell, don’t move because they are risk averse, then their actions will cancel out any drop in prices from forced sales.
And finally, the one thing that can never be emphasised enough is interest rates. They are not going up for a long time yet. This also offsets some risk of falling prices.

If you love it and it's available I would go for. It is always a good idea to buy if you can afford to during depressed times when most people aren't buying. My parents' former landlord went around buying lots of houses after WW2. He got them really cheap for even prices then.

I’m a high earner, high enough to lose my entire tax free allowance. Current mortgage is 16% of my take home income, new mortgage about 35%.

So over £123,000
35% of that is about £2000 a month mortgage? That doesn't sound unreasonable.

Mumoftwoyoungkids - no childcare and definitely no private school.

Weasel knickers, people who buy when they think prices are due a hike are overpaying. Because everyone is doing the same, right? Govt policy has a lot of impact on the house mover decisions, or any non essential purchases, really. If markets are left unchecked, predicting price trajectory is easy, and the law of supply and demand holds true. If the state intervenes, then the law is no longer applicable and people’s personal circumstances become relevant in assessing risk. If your personal circumstances allow, the buying in the most uncertain times can give you most return.

Yes. Bid. The predictions are that it's going to plummet, but no one knows when. If you truely love it, Imagine now if you lost out, lost it to another buyer? That thought process will tell you what to do.