Is buying a first home now a terrible idea?

[Edinburghwaverley]

I am 37, in stable employment, and in the process of buying my first home. The house is 7 years old and hopefully energy efficient. I have a 10% deposit and the mortgage should be affordable (as things stand now…..) costing about 27% of my Net monthly income, with a fix for 5 years.

But listening to the news about the economy generally in trouble, I can’t help thinking maybe I’m making a huge mistake. Surely this is the worst possible time to be buying? I’m in a really cheap rented flat. Maybe I should stay put?
AIBU to continue with the purchase?

Loads to think about, thank you. I think I will press on with the purchase, based on what you’ve said here and overpay as much as I can. The difficulty where I am isn’t so much that prices are high (though the have gone up, as they have everywhere) it’s more that there is little to nothing coming on the market, either to buy or to rent. If the rent went up in my current flat, I’d have to pay it because there’d be nowhere else to move to. If it got sold, I’d be in a pickle quite honestly.
(I’m not in Edinburgh - though it’s close to my heart! Currently living and working in a rural town where there’s very little turnover of people coming and going).

I'm not saying it, property experts are. And, if you look at the property market over the long tetermyou can see we are due a price depression - just hoping it's not anything like those we've seen before.

BTW we are already in WW3 we just haven't joined physically fighting, but we are fully vested providing arms and aid along with the EU, USA etc al. If we don't support Ukraine in a win or negotiate peace with Putin, we will have personnel in their within the next 12 -24 months based on the many consistent views of military experts that I have read/heard.

By the way I'm a sustainability professional 32 years exexpanding held some of the most senior roles in global businesses and I advise business on risks and futures. I've had a lot of success predicting likely outcomes based on balancing what I have read, heard and think.

In the UK we are so set on buying property. Our view of paying rent is skewed - rent money isn't wasted money it pays for accomodation. If as predicted, a depression in prices happens, the savings in purchase price will outstrip rent payments.

Sometimes it pays to sit tight but it's up to the OP to decide what's right for her and I hope she makes tge right decision for her.

@Booboobagins

you sound quite certain then about waiting til the end of the year? I’m of the same mind as so much going on atm with cost of living changes which I think we will really see the worst of next spring.

Btw how long (is a piece of string) do you see the depression lasting for? Do you think it could be short lived and govt will continue to prop up housing?

I think help to buy finishes soon

Property prices are only likely to get higher and mortgage payments increase as a result, with inflation your spending power will also go down. You might as well buy now, in 5 years you can take a good chunk off your mortgage, but waiting 5 years to buy may mean you can no longer afford too.

I'd buy, I was really worried when we bought this place in 2015 we paid over the asking by £40k and I felt sick at the price of it. 6 years later it's worth £200k more, easily. Whatever happens in the future you're almost always more likely to weather it owning than renting. Only thing I'd look into is whether a new build is the best investment in terms of resale and any terms and conditions as they're often different than an older property. Good luck!

I'd go for it, when I bought mine 16 years ago I was paying roughly the same for my mortgage as I would have paid to rent the house next door. My payments have now decreased whereas the rent has nearly doubled on the house next door in the same space of time.

If things are tight and you have a spare room you could rent it out tax free with the rent a room scheme.

Before you overpay your mortgage I would make sure you have savings to weather a financial storm.

If you were in financial difficulties you can't necessarily access any money from mortgage overpayments or even assume you can stop paying your mortgage without it affecting your credit rating (unless it is an offset mortgage you are getting) and damaging your credit rating will make it more difficult/expensive to move house in the future.

If you think your job seems secure or you think you could find another OK then I would go for it and buy. If house prices fall lending tends to tighten up and you might struggle to buy.

My sister is in a similar situation, and I think she's leaning toward buying soon. She's been wanting to buy a house for years, now, but has put it off for one reason or another. There's always uncertainty. At some point, we have to take that leap, especially if you're planning to stay in the home for several years or more.

Op I'd go for it.

Say you are paying £500 per month rent. That's £4k between now and December. £4k that could be paying off your mortgage.
The house value would need to drop more than the £4k rent money for you to be worse off.
Then take into account prices could keep rising.

I’d definitely buy. You’ll then have a foot on the ladder and every month’s payment will be a toe forward for your own property, rather than paying rent for someone else’s mortgage.

Personally, I’d go for a longer-term fixed rate. But that’s my own mentality. I’d rather know that that element of my outgoings isn’t going to change for x number of years.

I went to visit an auction flat this morning in zone 3, London. £130,000 guide price, housing association- elderly tenant died a month ago, utilities still on. Lots of viewers. Flat is a one bed, stripped inside, needs complete cosmetic work over but nearly everyone there looking to flip/divide up to rent out.

Depressing as we have a massive problem getting enough key workers in this area who understand it and will root for it.

Meant that it would be ideal as a starter home not an investment

2008? 🤣 They dipped for maybe 1-2 years and then came back rising quicker than ever.
OP you buy the house. Don’t pay 1 month more rent than you absolutely have to.
house prices will rise rise rise. We don’t have enough housing here in the UK and it’s only going to get worse and worse.
i dread to think how my children will ever afford anything.

Dont rent if you can afford to buy

Forget whether prices might rise or fall, the point is that each monthly payment reduces your mortgage by a month, thats all you need to focus on and that you are reducing your debt of a major asset bit by bit

If you lost your job for example would you be able to get another one and/or a lodger?

dont focus on moving on in 5 years just focus on the fact that the money is going into your pot, not your landlords