Is it true that the best time to buy a house was always yesterday?

treesareyellow · 2023-05-30T17:14:37+00:00

Rates are so extortionate at the moment I can’t help but hope they’ll fall a bit Would we be crazy to continue renting for now in the hope we’ll get a better deal later this year. We’ve been viewing houses and the one we fell in love with would be £500 more a month than what we are renting. I know you have security but we could use that money now, really. What does everyone think, will rates fall? How are people coping who are due to remortgage this year?

Original poster

treesareyellow · 30/05/2023 18:37

I realise this is a sweeping question but generally speaking!

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Ilikewinter · 30/05/2023 18:38

Well considering that the interest rate has risen again, and the last I heard on the news is that there may be further rises to come...then, no I dont see the rates dropping any time soon, and certainly never to the low 1%, 2% rates ever again.

OneRingToRuleThemAll · 30/05/2023 18:40

Rates are returning to normal. It was very unusual for rates to be almost zero. With quantitative easing they were effectively below zero. Banks were paying people to take money.

The last 15 years are already a module of study in my economics degree as a time that was prolonged but not normal.

peacelemon · 30/05/2023 18:41

OneRingToRuleThemAll · 30/05/2023 18:40

Rates are returning to normal. It was very unusual for rates to be almost zero. With quantitative easing they were effectively below zero. Banks were paying people to take money.

The last 15 years are already a module of study in my economics degree as a time that was prolonged but not normal.

That's really interesting

Original poster

treesareyellow · 30/05/2023 18:43

OneRingToRuleThemAll · 30/05/2023 18:40

Rates are returning to normal. It was very unusual for rates to be almost zero. With quantitative easing they were effectively below zero. Banks were paying people to take money.

The last 15 years are already a module of study in my economics degree as a time that was prolonged but not normal.

Interesting. But surely either wages must rise or house prices must come down, if high rates are to remain the same

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GeraltsBathtub · 30/05/2023 18:43

Not sure how to vote but I agree that we will probably never see rates that low again, certainly not for some time. Long term average is around 6% and the low rates we have had since 2008 are the anomaly.

Plus putting off buying means paying rent for longer rather than building equity over that time. So say you decided to wait a year before buying for rates to fall - I think you’d have to be confident prices would drop by at least a year’s rent for it to have been worthwhile.

Original poster

treesareyellow · 30/05/2023 19:00

GeraltsBathtub · 30/05/2023 18:43

Not sure how to vote but I agree that we will probably never see rates that low again, certainly not for some time. Long term average is around 6% and the low rates we have had since 2008 are the anomaly.

Plus putting off buying means paying rent for longer rather than building equity over that time. So say you decided to wait a year before buying for rates to fall - I think you’d have to be confident prices would drop by at least a year’s rent for it to have been worthwhile.

Never looked it it like that

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mondaytosunday · 30/05/2023 19:13

Trying to forecast the property market/ mortgage rates is a fools game. You MAY get a better deal, property prices MAY also go up. Unless you can save considerably more for a larger deposit in the meantime I'd just take the plunge.

3BSHKATS · 30/05/2023 19:21

Wages are rising the government has planned all along to pay for this mess by inflating the debt away.

With the added bonus of more of us becoming 40% tax payers and loosing our personal allowance.

3BSHKATS · 30/05/2023 19:22

mondaytosunday · 30/05/2023 19:13

Trying to forecast the property market/ mortgage rates is a fools game. You MAY get a better deal, property prices MAY also go up. Unless you can save considerably more for a larger deposit in the meantime I'd just take the plunge.

No I disagree. The writing is absolutely on the wall and staring everybody in the face at the moment. It’s like the calm before the storm in 2008. Everybody could see it coming.

Original poster

treesareyellow · 30/05/2023 19:30

3BSHKATS · 30/05/2023 19:22

No I disagree. The writing is absolutely on the wall and staring everybody in the face at the moment. It’s like the calm before the storm in 2008. Everybody could see it coming.

Show quote history

Do you think things will be super low again soon then

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3BSHKATS · 30/05/2023 19:49

I don’t think they were ever superlow even in 2008 2009. There was never this big 30% off crash that people were hoping for. But you’ve got to remember even a 10% crash in your position might be a year salary, then, when you add into the fact that there’s compounded interest on that years salary, shaving 10% of could be the difference between you, retiring two or three years early. And then if you take my very very strong advice an over, pay your mortgage, even if you are literally rounding up 854 to 860, for a few years, it adds up you would be amazed. And then when you’re in a better position in your 40s, you will be able to smash through that mortgage in five years as long as you don’t just keep borrowing all the time to do it up.

magicstar1 · 30/05/2023 19:50

I wouldn’t buy now, as I think there’s going to be something major happening over the next while. I’m in Ireland but I’m talking globally like 2008.
I was looking at houses back then but decided to wait for a while. We bought for €265k and the price for the same house was €399k two years before.

Original poster

treesareyellow · 30/05/2023 20:02

magicstar1 · 30/05/2023 19:50

I wouldn’t buy now, as I think there’s going to be something major happening over the next while. I’m in Ireland but I’m talking globally like 2008.
I was looking at houses back then but decided to wait for a while. We bought for €265k and the price for the same house was €399k two years before.

Hope you’re right

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3BSHKATS · 30/05/2023 20:09

The celtic tiger thing didnt really happen in the UK.

Lcb123 · 30/05/2023 20:19

We’re buying now, got a good price in a popular area. But - we do have a 20% deposit, and we’re buying a house we know we should happily live in for 5-10 years. I wouldn’t be buying with a low deposit at the moment

Original poster

treesareyellow · 30/05/2023 20:24

Lcb123 · 30/05/2023 20:19

We’re buying now, got a good price in a popular area. But - we do have a 20% deposit, and we’re buying a house we know we should happily live in for 5-10 years. I wouldn’t be buying with a low deposit at the moment

Having 20% is excellent! Congratulations on buying. We only have 5% so think negative equity risk is quite bjg

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Original poster

treesareyellow · 30/05/2023 20:34

3BSHKATS · 30/05/2023 19:49

I don’t think they were ever superlow even in 2008 2009. There was never this big 30% off crash that people were hoping for. But you’ve got to remember even a 10% crash in your position might be a year salary, then, when you add into the fact that there’s compounded interest on that years salary, shaving 10% of could be the difference between you, retiring two or three years early. And then if you take my very very strong advice an over, pay your mortgage, even if you are literally rounding up 854 to 860, for a few years, it adds up you would be amazed. And then when you’re in a better position in your 40s, you will be able to smash through that mortgage in five years as long as you don’t just keep borrowing all the time to do it up.

That’s a point

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MimiSunshine · 30/05/2023 20:58

because We’ve had such low interest rates for so long they’ve become considered normal.

the rates we have now are the historical normal. You might find this Article useful
and interesting.

ultimately no one can truly predict things but no I don’t think there is a property crash coming.
i would be looking to buy as big as you can afford so you don’t have think about moving again now in 5 years but without over stretching yourself financially.
don’t worry too much about the idea of negative equity as it’s only a problem if your forced to sell.

Projected UK Interest Rates in 5 Years

With inflation showing signs of easing yet labour market still tight, when will BoE start easing its monetary policy? Read on for more on projected UK interest rates in 5 years…

https://capital.com/projected-interest-rates-in-5-years-in-the-uk

Original poster

treesareyellow · 30/05/2023 21:02

MimiSunshine · 30/05/2023 20:58

because We’ve had such low interest rates for so long they’ve become considered normal.

the rates we have now are the historical normal. You might find this Article useful
and interesting.

ultimately no one can truly predict things but no I don’t think there is a property crash coming.
i would be looking to buy as big as you can afford so you don’t have think about moving again now in 5 years but without over stretching yourself financially.
don’t worry too much about the idea of negative equity as it’s only a problem if your forced to sell.

Thanks!

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AndIKnewYouMeantIt · 30/05/2023 21:09

Well... we bought in August 2008 with a 5% deposit at a 7% rate, and yes, we did go into negative equity, but were able to sell in 2013 for what we paid. Having had 5 years of building equity instead of paying rent.

10 years on we're 9 years off being mortgage free in the next house we bought.

Truestorypeeps · 30/05/2023 21:10

As you already allude, no one has a crystal ball. I don't think there will be a major adjustment/crash for the foreseeable... covid, the Ukraine war, inflation, higher interest rates, and still there is demand for housing with prices up everywhere. Ultimately there is only so much land and many, many people on it.

Of course, there will be a crash at some point, it's cyclical but who knows when, 15/20 years, you could be a good way through a mortgage by then. Then just as before, the prices will rise again and be back to what you paid at some point.

Short-term, perhaps the market will adjust slightly, maybe -5/-10% IF the COL crisis affects people's ability to get a mortgage, cooling demand. But historically, property prices, like the stock market, are on an upward trajectory with a few dips along the way. Of course, we could be on a peak or a trough, literally no one can say with any degree of certainty.

lionsleepstonight · 30/05/2023 21:15

20 years ago, my mortgage underwriting bosses told us for many years, a 25 year mortgage interest averaged out at 6%. Very interesting to see that still stands. Op, we've had years at v low rates and now we're in a cycle of more mid range rates. 18 years ago fixing at 5% was a great rate (i know as I did it).

Buy a reasonable home you can live in for at least 5 years and you'll ride out the bumps and be owning for 5 years (rather than still renting).

Take your current rent, x 12 x 5 = can you afford not to buy?

Also, where in the country are you. Not all of the UK has the highs and lows as you read in the media (which assumes everyone lives in London / South East).

VestaTilley · 30/05/2023 21:17

Rates won’t fall much; if you can afford £500 extra a month I would buy.

Freetodowhatiwant · 30/05/2023 21:23

If you have the money to buy now I would always go for it. I recently bought a new residential, after renting for almost 3 years due to separation, and although it’s a painfully high mortgage compared to previous ones I have fixed for two years in the hope that by then it will have come down to at least 3.xx rather than 4.xx. But I would rather get back into the market than risk renting. Yes my mortgage payments are now higher than my rent was, previously I have always found mortgage payments lower than what rent would be, but time IN the market is what counts in the very long run. Even if house prices dip (I don’t think there will be an outright crash) it doesn’t really matter if you intend to hold onto your property long term and can afford the repayments.