AIBU to pull out of house purchase at the 11th hour due to reeves

[BeGreatSheep]

We can due to exchange next week and I’m really considering pulling out given the general mess of the UK economy and the potential extra tax that have been suggested. Am I be ridiculous? Husband is team buy.

I think you are being unreasonable as it is a home you are buying, not playing an investment game. Even if/when the market drops, you buy and sell in the same market so your next home will also proportionately fall in price, so you do not loose out and even do better as the next home will fall more in real terms. If that doesn't make sense, look at it this way. You pay £500k for your first home. It drops 20% in value and is now worth £400k, but the next place you had your eye on, which was £600k, has also fallen 20%in value, so is now worth £480k.

Therefore, the only people to lose out from these changes are those down-sizing. But even then, they are greedy if they think the product of an overinflated bubble of a UK housing market is their money. Our house, which we paid £350k for 25 years ago, has increased in value 5 times over. That is not our money. We have only spent about £150k on extensions. Even accounting for inflation, we are still £1m over the top of what one might expect. This is the result of an over-heated housing market, which needs a massive cooling so the next generations can stand a chance to move out of their parents homes one day.

Perhaps it would help to reason the alternatives?

Why are you moving? Is it a first house or a step up the ladder?

If the latter what's the impetus for the move? More space, better area?

What happens if you stay? Is that more in rent and the uncertainty. Or you could miss the opportunity to make this step up because prices outstrip you. You may have to make the kind of investment in your current house that you don't see back. I.e there may be risks in staying as well and it might help give you better perspective to consider them.

I always find it helpful to consider if the choice was taken away. If tomorrow you got a call to say the sellers had changed their mind, would your overriding emotion be disappointment or relief?

How to say you’re a Labour supporter without saying you’re a Labour supporter. Maybe she’s Reform!!!!!! 😱

"Brainless Labour fangirls"

That phrase honestly says far more about you than it does about those of us who vote Labour

I would say go ahead and buy.
I think this new tax is going to be exactly like what happened when stamp duty was scrapped during Covid times; sellers started adding the price of the stamp duty saved to the price of their homes - so house prices were being inflated by what the buyers were saving on stamp duty.

I reckon it will be the same thing again; sellers will add the tax they are being charged to the overall price of the house.

I was in the same dilemma about buying a bigger house recently but we took the jump and l don’t regret it. It did cost us about £28k in stamp duty, however, it’s our forever home and we love it! Who knows what the tax situation will be like when we sell it, these things can change.

If it is your forever home and you will be there for the next 15-20 years, go for it! Better to regret the things you do, than the things you don’t!

Best of luck 🥰

95% of us have on your poll.

I understand your concern OP, but “don’t let the Tax tail wag the dog”. I’m sure it’ll all work out okay one way or another.

you can't predict what will happen.

And whether you own this house or another, or rent, you will always have housing costs etc. that may be affected.

So buy the house you want to live in, and your DH wants, and focus on productivity/earning/adding value and don't worry.

If you want scenarios, if you stop the sale then your DH might be really resentful and upset with you and run off with another woman and you have to rent a one-bed flat over a 24-hour Greggs so ........

Stop worrying. Buy the house.

Happy to oblige - you are being totally unreasonable! Pulling out now at this late stage is likely to fuck things up for a lot of people, especially if your new house and the one you are selling are a part of two long chains. Your anxiety can't be allowed to affect the lives of other people, some of whom might be desperate to buy/sell houses for all sorts of very pressing reasons. Worrying about what Reeves may or may not do is irrelevant - there's no guarantee that any new move regarding stamp duty/property tax will ever reach the statute books and trying to plan for imaginary scenarios that will probably never happen is the road to madness. I'm afraid you have to put your big girl's pants on and go ahead as planned and please try to do it joyfully for your husband and children.

And I say all this as a very anxious person who has somehow managed to survive nine house sales and purchases, some under very dire circumstances indeed, including three redundancies on the trot!

We’ll lose our jobs, the market will crash, we won’t be able to sell etc etc.

Well that could happen anyway, with or without Reeves.

Guess it would depend upon whether you've decided to take on the mill at the same time or not, as that would definitely put your interests in direct conflict and result in some rather gratuitous rude stories.

Oh, you mean the Chancellor of the Exchequer, not reeves.

It'll be fine. You've got the money for a house, houses are to live in, live in it and don't worry about a tax on profit later, as if you stay in it, there's no profit and you have somewhere to live.

I feel very sorry for your husband and the people you are buying the house from. You will cause the latter alot of problems and you are selfish.
I have anxiety and depression I take medication, but I would not put other people at a disadvantage, financially as well.
You know you have these problems yet still went ahead with everything and that makes you selfish knowing you may want to pull out.
I know I will probably be slaughtered for this, but people like you make me so angry, my condition can be bad at times but I would not use it as a excuse to make others life difficult. It's not all about you.

There are rumblings of anyone who's bought house over £500k in last 10 yes and paid SD will be exempted from RR plan to make those owning a home over £500k pay annual wealth tax. It'sad because a lot of people are asset rich but cash poor especially those living on modest pensions.

To be fair, this whole property crash idea has been around for a long time. There may be dips and slow downs in the market, but if this is your home to live in (rather than second property) it really doesn’t matter, you just ride it out.

Home ownership is for the long run. You need a roof over your head. You may go through periods of high payments, interest rate spikes, or - worst case scenario - negative equity… but as long as you have stress tested your finances it will be ok.

For the vast majority, home ownership has been a way to build some modest wealth and provide financial security. This has been the case for decades. That’s more trustworthy than the ifs, buts and maybes.

OP, you initially asked if you were being ridiculous. You are.

There are no confirmed plans at the moment. There might be clear cut proposals in the Autumn budget statement. Or there might not. Any proposal would not come into effect until April 2026 at the earliest.

Even if there is a "seller's tax", it would (if what's being reported is true) be 0.54% of anything over £500k. So if you buy a house after April 2026 for eg £600k- that's £540 a year (£45 a month). If that's unaffordable your problems are much bigger that what the Chancellor might or might not decide to do next April. Whatever Reeves does decide to do won't affect your current house purchase though (on which you're paying 10s of £Ks in stamp duty).

You could lose your jobs at any time, become very ill at any time, suffer from unwise personal financial decisions at any time if you were to pull out of this purchase and stay in your current home. Pulling out of this purchase though is definitely going to upset your husband, and seriously inconvenience other buyers/sellers in your chains.

You won’t ‘ride it out’ if you lose your jobs because the economy is tanking. You can ride it out if you are mortgage free or have serious wealth. Absolutely.

If makes me uncomfortable that op is being encouraged to ignore her instincts and put herself and family at risk because most of you wouldn’t want someone to pull out. Of course it is heartbreaking but these things happen. Everyone knows nothing is concrete until completion.

Op you must look at your own financial set up, factor in your reasonable concerns - can you genuinely ride out the loss of jobs etc? Do you have a plan B, a robust contingency. If the answer is no then seek further financial advice, insure your income or find other ways to secure your position.

What’s happened in the last few years that’s unprecedented? Pandemic? There was one in 1918. War in Ukraine? Never been war before, has there? Anything might be possible, that doesn’t mean it’s probable.

Don’t be so affected by life 😖

YABU. Totally ridiculous. If you’ve exchanged contracts, there’ll be a penalty payment.

if you’ve got cold feet about a house purchase perhaps you should have thought more carefully before contracting to purchase a property.

Is the alternative to keep paying rent and throwing all your money down the drain?

No read full thread. But I sympathis with the worries.

We sold in 2022. Just as the market dipped and the economy tanked due to Truss and Kwarteng. I watched the interest rates rise as DH and I tried to get the mortgage advisor on the phone to pin down the fixed rate. We ended up with a fixed rate 3% higher than what we had planned as rates were disappearing faster than we could secure one.

I was also under huge stress with work and had the very real fear that I could lose my job.

And our buyers were skittish. And our vendors wouldn't answer questions.

It was stressful.

BUT. Ultimately it was fine. Work stabilised. The interest rate we got was manageable (we made sure to stress test for higher rates on one income too) and we weren't buying a house we needed to upsize from a few years later.

Yes, the worries were very present in my mind. But we had a plan in place (and I had plan b, c and d in my head if we needed them).

Ultimately, you can't stop moving just because you worry what might happen in three or five years with policy and tax.

Can you afford the repayments now? If you've been approved for the mortgage, the lender will have carried out stress tests to see if you can afford under different scenarios.

Take a deep breath @BeGreatSheep and look through the stress and it will be much less scary than you currently imagine.

If the cap fits…..

I think the Tories did a great ruining the economy and stealing money/looking out for themselves in the many years they were in power tbh. 🙄 Labour couldn’t out do that in a year and i’m no fan girl of this Labour government but people have very short memories and rose tinted glasses apparently.

YANBU but I think you need to go ahead.

You need somewhere to live and that isn't going to change. Nor are properties going to get any less expensive.

If you buy, just be sure you won't need to move again before summer 2029. Then we rid of this incompetent govt and things will stabilise.

The Tories were booted out a year ago, if my memory serves me correctly. What’s your point. Let me guess, this is the typical Labour fangirl argument that Labour are doing great job shafting the economy because the Tories did the same.