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

[Colourmylifewith]

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

I’m in the same boat in many ways, except we bought it from wealthy people who had lived here for 30 years and so it was actually in great shape. My husband plays this game, would you sell it for … he got up to 3 times what we think it’s worth on the market and I still said no! Where would we go? It’s irreplaceable to me.

Also, how could we go back in time 80 years and plant the trees that were planted when it was built? Or the many other things done to the garden since then?

@AliceOlive
That's funny, the OP said that my advice was incredibly helpful...

Your point about the house being gone is just silly. She isn't committed to one particular house, and if prices go down she can buy a better one. That's the whole reason for her dilemma.

As is your point about ROI. I'm not contrasting buying in 2007 with not buying at all - I'm contrasting it with waiting until 2009. Your ROI would have been significantly higher if you'd waited, so evaluating purely on ROI you made a mistake by not waiting.

Or about paying just 1.2k extra for each year in your property. If you'd bought a year later you'd still be allowed to own a house, and would still have lived in it for many years. You've spent all of that additional money on owning it for one additional year. Which is obviously bad value.

All the points I've made apply whether she's paying mortgage interest or not so that's a non sequitur. And I've absolutely factored in the cost of rent in my previous posts - I even did the calculations (with and without mortgage interest!).

As for guesswork and assumptions - it's you who are assuming that prices will rise interminably. There may be good arguments for this, but you haven't made any. In contrast, I never said the market was definitely going to fall, in fact I said explicitly (several times) that I couldn't predict it. All I've done is outlined some evidence that prices may fall, some basic calculations to consider if they did, and my own reasons for holding off buying (for probably a very short time). I honestly don't know how a reasonable person could object to that.

Surely if you’re selling though it wouldn’t make ANY difference as your house would also increase or decrease the same? Why do people always want a cheap house but not realise their house would also be cheaper x

I would still view properties in this climate and if the right one comes up put in an offer.
Theres nothing stopping you from putting in an offer that is 10% below, so as to deal with the potential drop in value. At least right now you have time to think, where as 18 months ago it was
the Wild West. I’d be surprised if house prices are lower by the end of the decade, so I wouldn’t sit on your hands for too long. There’s a lack of housing and if there’s one thing we have all learnt in the last 3 years is when supply is short prices go up.

I was just about to reply to Alice to tell her I believe she’s my brain doppelgänger so will reply potentially on her behalf 🤣

Yes your absolutely correct.

If you'd bought a year later you'd still be allowed to own a house, and would still have lived in it for many years.

A House

The point Alice and I are discussing is that the right house is priceless; if she waited a year or even a day, week or month (depending on your local market); it wouldn’t be This house

If I had waited even a matter of hours to call to book a viewing I quite likely wouldn’t have got on the list for viewing the house that I currently own. It was just meant to be and I feel incredibly lucky because it’s not even a money thing, it’s a timing thing. This house had never been on the market for over 100 years. It was built and stayed within family for three generations.

Alice isn’t leaving her house for even 3 times the worth. The last people lived their 30 years. So it doesn’t matter how much money some one has, if the houses aren’t on sale then it’s irrelevant. And the best houses very rarely come on the market. And the best houses aren’t necessarily the most expensive ones. Like the one with the huge corner plot on the street, or the one where the owners kept original features, or the one where the garden is filled with mature trees and overlooks a park/lake (or something).

Sure we are talking about long term homes and forever homes rather than first rung. But if OP has huge cash it’s silly to not be jumping the ladder as much as possible. So I assume that’s the kind of home we are talking about here.

We are saying don’t wait to look seriously. You don’t have to buy. But if you see one the houses we are talking about then you will know when you should.

Spot on @LemonSwan we are of one mind. Neat to find someone with a similar outlook and experience. 💕

After ages and ages looking, my husband knocked on the door of this house and told the owner “my wife loves your house, if you are ever interested in selling, here is my business card.” We were recently married and still living in our own homes. We weren’t settling.

He had bought the house the same way, 30 years earlier.

By the way, we are sitting in the garden, on the patio we installed, now while I write this.

Just do it, prices in my neck of the woods are creeping up again and realistically priced houses aren't staying on the market for long

If you are renting at the moment and you wait say, a year, then you will have given another years rent to your landlord. So if you buy, and the house value drops by £10,000 , then you would have lost about the same as the rent you would have paid. So you would not be worse offf We have lived in the NW for 35 years after 12 years in the SE and prices do not seem to fluctuate as much up here. The only significant drop was 2008, but that followed several years of high growth when the banks were lending up to 125% of properties value followed by the massive financial crash. I wouldn't worry about that, but make sure you buy a house that doesn't have problems that may cost a lot to put right, unless you get the house for a price that allows for thar cost. Good luck.

I would probably keep a eye on what is around but don't rush into it, you don't want to miss your ideal home

If you anticipate not being able to get a mortgage in future it would be best for you to search for your "forever home" (for want of a better word) now and take out a small one while you can. You'll be able to negotiate a good deal if you're buying with a very low loan to value arrangement.

I’m just jealous tbh 🤪

I am looking avidly, have viewed a couple. I don’t have huge cash unfortunately, it’s going to be a smallish modest home, but I’m going to love it as it will be mine, a home for me and DC’s 💕

Ive read in the past few days:
100% mortgages are back
Rishi is considering help to buy again
And dispite all predictions house prices were on the up last month. If all that is true I cant see prices going down much.

If you are in a low house price area where there have not been huge rise, l live in one, there is probably unlikely to be much change in price so look for something you really like as you have time

Not sure if thus will help, but we bought in 2007 at the top of the market and our house value stagnated for years, however, we're now sitting on over 100k increase over 14 years. Appreciate some areas got much bigger growth but we're up North, and we don't see the fluctuations seen in the South.

Are you seeking an investment or a home and how long do you plan on staying there.

if it’s an investment you wish to flip (less than 2 years) then yes you are prudent to watch the prices and try to time the market. (although most people are informed that’s the wrong approach - yet we have whole systems of finance designed to do just that)

if it’s a home for 10 years plus - you can ride out any up and down of the market - with time in the market.

i have seen some drastic price cutting around us, and the headline rates propagated by market leaders, don’t bear up to local knowledge because they don’t represent the whole. You have to figure out if your area is typical, and thus headline rates and direction is consistent with your local area.

your post reads like you need a home, so find what you can afford that meets your need and any extras you can find. Let the profit margin take care of itself.

Some good points, thabk you! I can remain where I am as long as I choose to, but it will never be ‘mine’ I’ve put my stamp on it and I’m happy with it, but I want to put roots down if that makes sense?

The point that someone made about cash losing value in a savings account due to inflation is worth considering. However if the main asset you wish to buy is actually decreasing in value then effectively you're in your own little deflationary bubble and your cash is effectively gaining value (and the interest you earn can help pay your rent).

@Walldoorwindow but you're pitting something that is known against something that may or may not happen.

We know that cash is falling in value. House prices may or may not fall in value. It's a gamble. I think that they will probably stagnate. You also need to consider the fact that wages are rising at the fastest rate in decades.

Affordability is a factor, but it doesn't necessarily stop people buying. It's been reported that record numbers of first time buyers are taking out 40 year mortgages - definitely not something that I would recommend, but people are desperate to escape the rental market. For many, the choice is to accept a longer mortgage term and a smaller property than they could have got 5 years ago, or continue to struggle in the hellish rental market. People can't delay buying indefinitely as they will be too old to get mortgages and start families.

Glad your looking. The unicorn houses I am talking about are in every price bracket and every size. They are just rare.

I wouldn’t worry about this. You will know if you see your home and it won’t even be a question as to whether you wish to buy it 😊

Thank you for the reassurance!! I hope so 🙏🏻 and il definitely keep up the search!!!

Goodluck 🥳