House Buying at this Crazy Time?!

[Notacelebrity]

Since starting to save for a deposit on a house, I have felt the comfort of having a safety net.
Now the time has come where we have enough for a deposit, but after fees we will have £00.00 left in the savings. The thought of having no safety net when we have a mortgage to pay and whole we are getting to grips with new payments for bills, council tax and mortgage (it will cost us about £200/300 extra a month) is really daunting.

We currently have an offer accepted on a house but the sellers haven't secured their new house yet so we haven't signed anything or put down any money at the moment.
We are still saving but DH's work has gone slow due to CoronaVirus. He has had 2 weeks off already and things are looking less and less secure.

There is talk of stopping any work which needs lots of people working together. It isn't a job where they can wash their hands often or at all really as it is manual labour, outdoors, all over the country. Sometimes 4/5 hour journeys to really rural locations. No washing facilities for miles.
Sometimes working away using hotels (which obviously is a concern due to travellers)

I am just really freaking out about money.
He does have a contract but we haven't had any news on whether or not he will be paid if work is cancelled.
He is putting on a brave face but I can see he js worried about work too.
Would we be mad to buy at the minute? Should we wait for this all to blow over? (But lose our dream home in the process? And also we have no idea how things will be after the cv stuff all blows over?)
Or should we be saving saving saving and hope that the sellers don't find anywhere for a few months so we can get an extra couple of grand behind us?

This wasn't going to be a corona virus thread- it was going to be a 'do you use yojr entire savings for a deposit?' Thread but while writing down my worries I realised I am actually really really worried about buying at this crazy scary time!

I am a sahm with 3 under 6 and due my 4th in a month so I can't even get a part time job to help save at the moment. Really worried.

Yabu- buy your house as usual
Yanbu - delay for a while until this blows over

@Reginabambina we are spending the money on rent anyway- buying a house isn't the same as a normal loan though is it? Its where we will live most likely for the next 20+ years. Its like exchanging your rent that you have to pay anyway for a mortgage which you'll also have to pay.

We were saving for a specific goal - deposit.

Definitely taking on board the waiting to see if house prices go down but i am surprised so many people think you should have thousands extra saved.
We will struggle with rent if dp lost his job anyway - what are renters going to do if they lose their jobs? Or house owners who dont have savings?
Are you all really worried that people will seriously lose theor homes over this? Not sarcastic (incase it comes accross that way) but i've been purposely avoiding CV news due to anxiety and stress being so far along but I've gone mad on it today and its hard to tell what is the hype and what really is concerning.

No way would I be doing this, sorry OP. Aside from what you've already mentioned, a 5% deposit leaves you very vulnerable to negative equity in the event that house prices drop, which it looks like they may well do in the wake of the CV pandemic. Were you planning on fixing your mortgage? How long for?

The comment about having at least 10k in the bank after purchase made me laugh - incredibly out of touch! - but equally having 0 is not a good idea. I also grew up fairly poor, never expected to be able to buy a house etc, but I did all the research I could and made sure we had at least 1k for unforeseen expenses. Not to put you down at all, because you've done an amazing job saving (especially with 3 kids to support!) but just in terms of being able to use your judgement to make an informed, sensible decision.

You reference advice to put as much money into your deposit as possible - this really matters when you are looking at crossing a threshold. What this means is that there are certain figures of LTV (loan to value, how much of the house price you are taking a mortgage for) where interest rates drop appreciably. At 5% you are likely to be on a fairly high interest rate - if you can push that to 10%, it drops slightly; again at 20%, and so on. This is for most lenders, but I can't speak for all of them.

So, if you have £7k for a 5% deposit, and have an extra (say) £1k, putting that towards a deposit won't make much of any difference to your interest rate. It would be much more sensible (imho) to keep that as an emergency fund, because you never know what expenses you'll run into with a new house. Take it from me - we paid £500 for a survey and still got stung for £8k worth of damp remediation 3 months into home ownership.

All in all, I think it would be a really risky move to try and buy now. It's unlikely that prices will go up in the near future - wait it out if you can, do some research into every part of the process so you can equip yourself with knowledge and advocate for yourself where necessary, and keep saving in the meantime. Good luck :)

@Notacelebrity Losing your job with a mortgage could, worst-case scenario, mean your home is repossessed. This is really not something you want to have happen as you will need to declare this on future mortgage applications.

You can get help with rent if you are an unemployed renter... That's the difference. And considerable one. It's MUCH more difficult to get help with mortgage. I was never worried when renting because there is a solid safety net. Not so much if you lose your job and own

I suppose the difference in buying vs renting if your DH got made redundant I'd you could claim housing benefit whereas you cant do that for a mortgage. I dont think most ppl have thousands of savings after buying a house though though a bit would probably be a good idea! Will it literally be 0?

*is

Personally I wouldn’t be making any major financial commitment currently. House prices are going to crash on the back of this. It’s inevitable.

@dayslikethese1
Not literally 0- 0 in savings account at thia moment but still whatever we have in regular current accounts which is usually 2-300 for me (never really gpuch this except phone bill- 12 a month) and 4-500 for dh. So i suppose we always have at least 600 between us for food and bills and whatever else is needed. I didn't even consider that though.

For all of you talking about a housing crash being inevitable
How do you know? Or what makes you think that? Is it experience based on 2008 recession? I was just a young teenager then so I don't remember it well enough.

Also, I am literally trying to defend trying to buy still arent i? i really want to buy this house apparently! Even though talking to dh earlier I was the one saying 'we should pull out!'
Thank you to everyone who has commented for being my sounding board. Its very helpful

The economy is about to crash and burn. In 2 week you will not be able to leave your house. Many many people will be unemployed for a couple of months. Be glad you were saving and hold onto it until this thing blows over. No one will buy that house in the mean time, trust me.

It's a domino effect. Stuck in house, shops closed, forced holidays, shop goes under, unemployment, no income, no one buying in shops, no one buying houses, house prices crash.

@Slith You are incredibly out of touch.

How long would it take for house prices to crash? I cant wait

Although things have ramped up yesterday and I actually believe the hype now

We were about to buy.

We are not now... We don't know re jobs and our rent is low ish.... So I thinm we would quote possibly in negative equity....

So for us the calculation is the risk of NE against the certain cost of rent... Which we would have paid if both out of work

For all of you talking about a housing crash being inevitable
How do you know? Or what makes you think that? Is it experience based on 2008 recession? I was just a young teenager then so I don't remember it well enough.
I remember it, though I was just entering workforce. How we know, at least me, is that I read news. Financial markets are being affected and some numbers are very much like what happened before crisis from what the articles say.

I was actually saying to a friend when all this started in Italy that people should be told to quickly financially secure themselves as much as they can. I am glad I fixed for 5 years due to chance of Brexit financial instability...

Out of curiosity. How many % is your deposit and how long would your fix be? Have you read what happens to people who end up in negative equity? I bought with 5% deposit. Lot's of people wouldn't. But it was worth it even though the interest was 3% smth. I renewed into new deal 2 years later with 20% equity and 2% interest because house needed work. For some people though, it wouldn't be worth it. And if we were buying right now. I would wait... Not for bigger deposit, but stability. And bit of saving. Just lead around a chimney costs couple hundred....

Also. In my situation everything worked out cheaper. We added a car to the bills and it was still less in total than when we were renting and were without a car

@BodiesMakeForGoodFertiliser 5% and only a 2 year fix.

I really don't know what I would do if they called up today saying they are ready. I probably would ask them to wait for a few more months or failing that pull out

that sounds good. It would be nice if houseprices went down. To be honest if I am worrying (baring in mind a week ago I was saying it was all a load of bollocks) then i imagine the sellers are too. They would be buying a bigger house with a bigger mortgage so if i were them i eould stop looking and stay put. At least for now.