AIBU to ask what your predictions are for the housing market over the next 5-10 years?

[jagjagjagjaguar]

AIBU because I understand that it is very difficult to predict the market however I am interested in your thoughts all the same.

I have just purchased a property, over a year of looking and the area we were searching is particularly known for houses to be sold within a day, usually over the asking price. Commuter town, just outside of Manchester. We have just had an offer accepted after a year of having no luck (always outbid!) for 18k over and the mortgage valuation has come back and valued it 12k lower.

We are currently deciding whether to bridge the amount, however; it got me thinking about where we will be in another 5/10 years. We have had an excellent 5 year fixed rate of 1.16% and worry that house prices will remain steady or decline and interest rates go up when the fixed rate comes to an end. Of course, no one can predict the market, however; I recently saw an article in the Times predicting that in GM over the next 5 years they are predicting a 30% increase in property prices.

As FTB's it took us many many years to save, however, I really feel for the next generation who will suffer even more if house prices continue to rise. I know there is a link with the interest rates, however, if interest rates increase I imagine it will cause an economical catastrophe and many will struggle to pay their mortgage (although prices then therefore drop?)

The market has been crazy over the last two years in this particular area and I wonder whether it will always be like this? I imagine there will always be demand for people wanting to purchase their own property, particularly with the ever increasing rent.

Will save this thread and read it back in 5 years time for a very interesting read!

Anyone like to join me in a discussion?

I'm an old(er) FTB looking for something in Cornwall. Pray for me!!

I just can't see us ever getting back to the days where a 5% mortgage was considered average. If we do so many people will be fuckkkkkked.

Greater Manchester has such a buoyant property market that generally stands up well to market pressures. I’d not panic tbh
I bought a tiny 2 bed that went up in value by over 25% in 3 years…

@mellongoose oh good luck! has it been mental down there too? I imagine so, a beautiful part of the world

@TheHouseILiveIn we have put 25% deposit down but the length term is eye-watering! We are going for a longer term and hoping to overpay each month to bring it down. I think they are bringing in a 50 year mortgage term.. another reason for prices to increase, crazy!

@TheHouseILiveIn we have put 25% deposit down but the length term is eye-watering! We are going for a longer term and hoping to overpay each month to bring it down. I think they are bringing in a 50 year mortgage term.. another reason for prices to increase, crazy!

That's a good plan. Yes, gone are the days of a 25 year mortgage being standard. I wonder what the average length for a ftb mortgage is these days.

It isn’t clear what your figures are like - you bid 18k over asking but the mortgage valuation was 12k lower so still 6k over asking price? Or 12k under asking?
Finding an extra 6k for a first time but doesn’t seem like too bad a gamble in the current climate if you can do it.

You’re fixed rate is awesome- we’ll done getting that and congratulations on your first property.

No one knows and no one would have guessed Bank of England base rate would have dropped so far or stayed so low for over a decade.

Eventually the base rate will creep up and impact on mortgage rates - although who knows when? That is likely to impact of property prices but if wage inflation is higher, your wages will rise faster than your mortgage repayments, so it’s not necessarily all doom and gloom if mortgage rates rise as long as you’re working and earning more.

My prediction is that in 5 years’ time, base rate is 1% - 2% higher and you can switch a mortgage for 3% - 4% if you have the equity. But this has been predicted before and not happened, so…
The housing market is frothy AF. Whether it drops or stabilises in the next 5 years is a tough call. If you can overpay on your excellent mortgage rate, you’ll be in a good position to weather any adverse drops. At the end of the day, as long as you can afford your mortgage and you like your place, whether the price rises or falls mostly doesn’t really matter.

I would expect your house to increase in value over the next 5 years overall (I work in the industry). Obviously no one can predict the future and this is my opinion only but I expect there will be a small dip as the pent up demand from stamp duty ends but this will likely stabilise and then grow over a 5 year period.

The best thing you can do, IMHO, given that you have a near 1% rate is to try over the next 5 years to overpay your mortgage down to a 60% Loan to Value. This will mean when your fix is up you’ll have access to the best deals in market (these are almost always at 60% LTV)

Good luck and congrats on your first home

I think Manchester will be going up for some time due to the BBC relocations and any devolution of government departments. Influxes of people with higher paying jobs puts upwards pressure on the housing market as people can stretch their budgets even further.