To just be so upset about house prices

[spuddy56]

We started looking in December after scrimping and saving for years and its got more and more out of reach with every passing week since then. We've had two sales fall through due to downvaluations, so not only did we need the huge deposit we had saved up for years, we needed 10k on top of that which is impossible for us. We are paying rent and have no family help. We viewed a tiny house that we love and has been on the market since beginning of April with no offers but the seller won't budge on the price. Based on one year of sold prices in the area its about 40k too much, even taking into account the 10% rises over the last 12 months. Theres just no way a mortgage company would lend that much. Been to view another one and it's tiny, has had no offers and is worth a lot less but agents don't think they will go lower. We've had to adjust our expectations down and down despite being what we thought were healthy earners. How are first time buyers managing to buy right now without help?! I'm so so upset at not having somewhere to settle and call a permanent home.

Don’t be silly. “People like you”? You have no idea what I thought at any time other than the days on which I posted to this thread.

I get that it must be hard when you are personally so committed to endless house price growth that you can’t consider a different outcome without becoming angry and irrational, but try to control yourself.

What does your analysis of the current economic conditions look like? How do you think that price growth will be sustained when interest rates go up, the cost of living increases and cheap credit is restricted? I’m all ears.

And given the government announced literally last week that they will indeed pay everyone’s mortgage if they get into trouble yes I do think that is on the table as it has been in the past.

Another one who is over-excited. Your post is a little incoherent so I’m not sure what you want me (or whoever) to paint a picture of.

No they didn’t. You had this explained to you upthread but your fingers clearly remain in your ears.

I’m so sorry my little brain just fizzled there with excitement dancing and ice just came on again.

Are we just mad to try and buy now? We've had an offer accepted on a reasonably sized ex council house. So scared about the market that I'm just full of worry.Knowing our luck, it will probably be downvalued anyway!

It's very individual.

Is the property good value?
How many times your salary?
What size deposit?
Are you paying rent?
What jobs do you have?
Will salaries increase?
Do you have savings?
How long will you fix for?

I would give different advice for example to a doctor borrowing 4.5 x salary with a 30% deposit to a retail worker borrowing 4.5 x salary with a 5% deposit.

We are borrowing 3.6x salary with 10% deposit and about 5k left for emergencies (our cars are both almost at 100k miles so if they die beyond repair soon that won't get us far give 2nd hand car prices). I don't think its good value, but then I've not seen a single house that is!
We are paying 1100 a month rent at the moment for something half the size. Just what if they crash by 10/20% and we end up paying more than we should have. The prices rises are mental round here.

For me, it completely depends on your circumstances. Basically, how bad would it be for you be if the place lost value and how does that compare to carrying on with whatever you are doing now?

@spuddy56

We recently bought our first place and we're worried about this too. We reasoned that the house would need to drop significantly for it to have been a bad move.

If you're paying £13,200 a year in rent (and I assume that will increase this year), then the house could devalue by that much a year and you're no worse off.

If I were paying that much rent for a smaller place than I could buy (as opposed to the situation of some people who move out of a large expensive rental into a smaller bought house) I think I'd do it. But not in an ex-council if it was a town where these have a bit of stigma for resale. This is the case in my northern town, due to what boils down to warring family factions, but they're quite desirable in my current SW town due to the size of the rooms and gardens.

And if her mortgage payment doubles? What happens then? The OP is right to be cautious.

@Iamthewombat

If she gets a 5 year fixed rate then she's protected against that for now.

Not on a fixed rate mortgage it won't. Foolish to go for a 1 or 2 year deal at the moment.

@Iamthewombat

Out of interest, do you own your own home?

I think it's easy for some to sit back and tell others to wait for a crash, from the security of their own position.

It's true, Op should be cautious and most people on this thread seem to agree with that but your endless doomsaying is tiresome.

Unless you're also sitting in rented, desperate to own your own home and have finally saved the money to make it possible but decided not to buy? Is that the case?

You don't have to be living in rented to be concerned about house prices and potential drops.

I'm currently buying, probably at peak but I'm taking a 5 year fix and my deposit is from selling an overpriced flat (that I'd cleared the mortgage on thanks to low interest rates).

I'm buying a period terrace in a desirable location with good transport links.

I think I'm buying at peak and will probably lose money but I'm hedging against it as much as I can.

Yes, I understand that. If you look a handful of posts up, you'll see we've also just bought and are concerned.

No one is saying not to be concerned but the pp seemed to be at great pains to put the op off.

Basically, nobody ever really knows what is the absolute best thing to do. When rates were high after 2008 and prices dropped, we only had 10% of the sale price of our first house as equity 5 years later, but the next house up was more affordable than it is now.

There’s someone on another site I’m on who’s been banging the same drum for over a decade. He told everyone how he was renting and we’d all look like fools when he bought far nicer houses than ours for a fraction of what we paid.

Anyone claiming to be able to predict with any accuracy the trajectory of house prices needs to be able to answer these two questions with a “yes” to not being laughed out of the room as a bullshit merchant.

1. Have you spent the last decade leveraged to the hilt as a property owner?

2. Have you just now sold up, and moved into rented accommodation.

No, not if you are concerned, but if you are boasting on here (not you, by the way) about your superior understanding of where prices are about to go it’d be curious indeed if you hadn’t sold the home you’d owned all the way through the recent years’ rises to take advantage of your specialist knowledge.

An expert in economics who hasn’t heard of fixed-rate mortgages…

I remember housepricecrash website when I used to have to refer to some of their stats back in the early 2000s. The posters on the forums were all rubbing their hands then anticipating a big crash…and they missed out on massive inflation in the meantime. Yes house prices can crash - just ask N Ireland / certain pockets of the north of England if they have recovered after the financial crisis - but you are buying a home OP not a house. Fixed rate mortgage buys you time to save. I hope you enjoy it!

It’s all well good advising people to move to cheaper areas, but all that does is increase the prices of those areas and make it impossible for locals to buy.

house prices are ridiculous and need to be brought right down, the bubble needs to burst.

@skintasabint

you could make that argument about people from the north buying in cheaper parts of London, etc. Where are the locals supposed to buy?

We bought our ex council house in 2007 just before the crash. We were in negative equity for a couple of years but now it has doubled in price. If you are planning to stay out and are in it for the long haul it should be fine.

@NotKevinTurvey

I don't think anyone is boasting about their superior knowledge. Merely pointing out to those that are saying the economy is doing brilliantly and house prices only ever go up, that that may not be the case. The point is, no one knows. Analysts (educated professionals) don't know either, so how do a bunch of random mumsnetters?