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Original poster

If I don’t need a mortgage, should I buy a house this year, or wait and hope prices drop

96 replies

Colourmylifewith · 04/05/2023 10:06

I’m really undecided. I don’t need to sell and won’t need a mortgage (for the right price) I’m in the north and just can’t decide if now is a good time. The house I would be able to get would be smallish, prob terrace or semi with a small garden, but it would be a home for us, would it be unreasonable to buy at the moment? I just don’t want to buy at a bad time and think if prices drop I could maybe get something slightly bigger? Any help appreciated

OP posts:
BMW6 · 04/05/2023 10:07

You may as well toss a coin. No-one can predict the future.

Original poster
Colourmylifewith · 04/05/2023 10:11

BMW6 · 04/05/2023 10:07

You may as well toss a coin. No-one can predict the future.

I hear you, maybe that’s why I’m stressing about it, the unknown!

OP posts:
CornishGem1975 · 04/05/2023 10:11

House prices are still rising where I live. People have been saying for decades 'should I wait until prices drop' 'can't wait for a housing crash' and it just has happened here, even through the recessions.

Gtsr443 · 04/05/2023 10:11

House prices rose by 0.5% last month after seven months of drops.

CornishGem1975 · 04/05/2023 10:12

*hasn't

Fizzadora · 04/05/2023 10:15

House prices won't drop sufficiently to make it worthwhile waiting. They may level off a bit.
Unless you are planning to sell it again in the near future, the value is totally irrelevant anyway.

AliceOlive · 04/05/2023 10:16

I wouldn’t wait. There’s not guarantee it will drop any time soon.

Original poster
Colourmylifewith · 04/05/2023 10:17

Gtsr443 · 04/05/2023 10:11

House prices rose by 0.5% last month after seven months of drops.

Maybe this is as low as they will get then!!! I was just hoping maybe a slight drop would get us something a little bigger!

OP posts:
OakleyStreetisnotinChelsea · 04/05/2023 10:20

I wouldn't over think it. Do you need and want a home long term for yourself and your family? If yes then buy a house. Ultimately, and especially without a mortgage, whether it is worth more or its in a couple of years time doesn't matter as your are living in it, it is your home and it's value to you is not measurable.

CornishGem1975 · 04/05/2023 10:23

All the analysts predict that house prices will fall in 2023 and 2024, however so far all the 'predictions' for the economy have been as useful as a wet finger in the air.

TheWhalrus · 04/05/2023 10:25

I think it might be a good idea to adjust your mentality slightly. Instead of thinking 'I want to get the absolutely best house I can for the money I have' try thinking along the lines of 'this is the house we need (insert specifications here) and this is the money we have'. Then take a look at what's currently on the market and put in an offer if you like it.

Prices are probably not very relevant if you're buying and selling at basically the same time in the same area and looking for a place to live long-term rather than a place to sell in 1-2 years.

If you're buying cash-in-hand then you might be able to negotiate a price reduction from some sellers.

bibliomania · 04/05/2023 10:26

If you're renting in the meantime, the rent you pay over the next year or so may well outweigh any financial gain from waiting (if there is one).

NotQuiteUsual · 04/05/2023 10:40

When you're buying property it's all proportional really. If the value of it drops, so will the value of all properties, so proportionally you'll still be in a similar position. The main thing is ensuring you can get a house that will meet your needs. As long as it's what you need and want you're good even if the price drops or raises.

Ludlow2 · 04/05/2023 10:48

Colourmylifewith · 04/05/2023 10:11

I hear you, maybe that’s why I’m stressing about it, the unknown!

Show quote history

What does is it matter?

You will own it outright so have no worries about negative equity.

It is a home for you and your family that is more important.

FelicityFlops · 04/05/2023 10:56

I would start looking now to see what is available. Are you absolutely tied to your current location or would you be able to move a little further away to get what you really want?
Do you want something that is perfect immediately or would you be willing to take on a doer-upper - that might broaden your choice.
As PP have said, nobody can predict the future and it is always more advantageous to have a roof over your heads, which is not going to be taken away by either a landlord selling up or by defaulting on mortgage repayments, so if you have the cash, spend it wisely now.

MidnightMeltdown · 04/05/2023 10:57

Gtsr443 · 04/05/2023 10:11

House prices rose by 0.5% last month after seven months of drops.

This is because mortgage rates have gone down following the shock of Trussonomics, despite the base rate rises

I wouldn't delay buying. Everyone said that house prices would crash at the time of the referendum result, when we left the EU, when Covid hit, when the stamp duty holiday ended etc etc. If I'd waited then I'd have been so much worse off and ended up with a much smaller house. Waiting for a crash is a fools game.

High inflation is usually followed by wage rises, so prices go up, not down. Meanwhile, your cash is losing value.

Walldoorwindow · 04/05/2023 11:35

bibliomania · 04/05/2023 10:26

If you're renting in the meantime, the rent you pay over the next year or so may well outweigh any financial gain from waiting (if there is one).

It's very hard to predict the future obviously but it's definitely sometimes better to wait even if you're renting. Many experts are predicting a fall of around 10% over the next year which is a lot more than a typical rent (particularly when mortgage interest is factored in).

In my case for example, annual rent is about 4% of the value of the house (and the houses I'd be looking to buy). According to the nationwide house price index, the house I live in is worth 6% less than it was nine months ago, so it was definitely not the right thing to buy back then. The mortgage interest on that 6% would have made it more like 9-10%, so at least three times what I would have paid in rent during the same nine months. But even without a mortgage it would be double the cost of renting.

I definitely share the op's uncertainty but I'm holding off buying for now. Keeping a close eye on things yes, will probably even do some viewings, but interest rates are rising at the moment, which typically does reduce demand and lower prices, so I'd be very cautious about actually going through with a purchase at the moment.

GasPanic · 04/05/2023 12:10

It's a difficult one. IMO houses are significantly overpriced, and the government seems to keep shoving insane props at them like help to buy. At some point in the future house prices are going to fall (unless we turn into a complete nation of renting) as they are becoming less and less affordable. Mortgage rates are on the up and who knows where they are going to settle. This is a big negative for house price increases.

OTOH you need to look at the return on your money you are getting if you do not buy a house. Presumably you are paying rent. You presumably aren't getting a good return in interest on the lump sum you would buy a house with, so that is a good reason to buy and not keep it in cash. Remember inflation is degrading cash significantly at the moment.

For my story, I bought just before covid after many years delaying because I thought prices were unsustainable. In that time I have saved a significant amount of rent (offset somewhat by house maintenance costs) plus house prices have gone up a lot in my area. The amount I have saved by going from renting to buying is substantial. Whether this will continue or not, who knows, but I reckon prices would have to fall over 35% in my area for me to be negative compared to have continued renting.

I think if I could afford to buy a house for cash, and can stay in that house for a long time without moving, then I would do it again without hesitation. Even if prices drop significantly I could wait till they recover at some point in the future.

If I was mortgaging right up to my last penny for a starter home that I was are soon to move out of into bigger things, I would be a lot more careful. I would also be very careful looking at stuff like new build flats and especially luxury flats. In my area there are a lot of new build flats that are not over their 2007 price. That is a massive loss in real terms.

Whammyyammy · 04/05/2023 12:18

MN predictions is a crash is/was coming for brexit, covid, cost of living....and bargains will be had.
IRL, house prices haven't dropped at all, let alone crashed, and round by me they have risen still.
If you see a house you want now, buy it. As it will probably go up.

People waiting for the crash to but, will be renting all their lives

Deadpalm · 04/05/2023 12:22

There are lits of people around paying rent for last 8 or so years because "prices might come down"

Whammyyammy · 04/05/2023 12:24

Deadpalm · 04/05/2023 12:22

There are lits of people around paying rent for last 8 or so years because "prices might come down"

And as a consequence, may do for the rest of their lives

Original poster
Colourmylifewith · 04/05/2023 12:25

TheWhalrus · 04/05/2023 10:25

I think it might be a good idea to adjust your mentality slightly. Instead of thinking 'I want to get the absolutely best house I can for the money I have' try thinking along the lines of 'this is the house we need (insert specifications here) and this is the money we have'. Then take a look at what's currently on the market and put in an offer if you like it.

Prices are probably not very relevant if you're buying and selling at basically the same time in the same area and looking for a place to live long-term rather than a place to sell in 1-2 years.

If you're buying cash-in-hand then you might be able to negotiate a price reduction from some sellers.

Good point, I would plan to stay there for the foreseeable and I am tied to the area due to schools and family

OP posts:
Original poster
Colourmylifewith · 04/05/2023 12:27

FelicityFlops · 04/05/2023 10:56

I would start looking now to see what is available. Are you absolutely tied to your current location or would you be able to move a little further away to get what you really want?
Do you want something that is perfect immediately or would you be willing to take on a doer-upper - that might broaden your choice.
As PP have said, nobody can predict the future and it is always more advantageous to have a roof over your heads, which is not going to be taken away by either a landlord selling up or by defaulting on mortgage repayments, so if you have the cash, spend it wisely now.

Mainly want to stay local due to DCs school. It’s a cheap place to live, comparably to a lot of the country.
Not looking for perfection but I am aware of my very limited DIY skills and would need to be careful not to spend a fortune using trade people!!

OP posts:
Original poster
Colourmylifewith · 04/05/2023 12:29

Walldoorwindow · 04/05/2023 11:35

It's very hard to predict the future obviously but it's definitely sometimes better to wait even if you're renting. Many experts are predicting a fall of around 10% over the next year which is a lot more than a typical rent (particularly when mortgage interest is factored in).

In my case for example, annual rent is about 4% of the value of the house (and the houses I'd be looking to buy). According to the nationwide house price index, the house I live in is worth 6% less than it was nine months ago, so it was definitely not the right thing to buy back then. The mortgage interest on that 6% would have made it more like 9-10%, so at least three times what I would have paid in rent during the same nine months. But even without a mortgage it would be double the cost of renting.

I definitely share the op's uncertainty but I'm holding off buying for now. Keeping a close eye on things yes, will probably even do some viewings, but interest rates are rising at the moment, which typically does reduce demand and lower prices, so I'd be very cautious about actually going through with a purchase at the moment.

Show quote history

Thank you, this was my line of thinking….. I like the idea of still doing viewings though!

OP posts:
NotAnotherBathBomb · 04/05/2023 12:29

House prices have meant to have been dropping since covid and it hasn't happened.

I rent a flat and everyone said flat prices would plummet as no one wanted to live in them anymore since covid. Lol, it's like letting agents are competing to see who could rent the shittiest flat for the most money.