High rates and 5% deposit. Is it worth it?

[Chasingtrains]

FTBs in the SE so prices are very high here. Fed up with renting, we want to get on the ladder and buy a place we can call our own, decorate etc.
We currently have enough saved for a 5% deposit which, with current rates, would mean higher repayments to the max we could stretch. As property prices are going down though, we might be able to secure a decent place in the forst few months of 2024 if the trend is downwards as most have predicted.
We might be in a position to receive a lump sum of money in a year or so - it’s company shares via DH’s work, although we don’t yet know when exactly this might happen and how much that will be (suspect enough to bring us closer to a 10% deposit).
Should we continue to rent and wait for the shares (however long that might take) or just go for it now and take on a 95% LTV mortgage? Is it crazy to even consider that in this market??

I would wait until you have a 10% deposit.

I'd wait. You could very easily end up in negative equity in this market. Not end of the world if you want to stay put for a bit, granted, but not fun. You'll get better rates with a 10% deposit, and probably a lower price too (so you might need less to get to 10%). Feels like a no brainer to wait a few months / a year more. Maybe start looking just to start to get a feel for the market, though, as it can take a lot of visits to sound out what you both want.

@laclochette there are a few reasons why I don’t want to wait longer, including the current stamp duty rates and being fed up spending money on rent. I should just be patient I guess.
We are both in our 40s with 2 DC so that also plays a part

The parents of two small children should not be mortgaging themselves to their eyeballs and risking their home going into negative equity.

The two small children do not care about the paint (or lack of it) on the walls.

Protect their security by remaining flexible for another year and bide your time, and strengthen your position.

@Combusting isn’t negative equity an issue only if you are planning to sell?

It depends how long you plan to stay, in the south east, you're unlikely to lose money if you're looking at a ten year plus home. Even with recent dip we've just had ours valued for mortgage and we've made 150k ish in 7 years (it did need work)

@SgtJuneAckland potentially forever or for several years anyway (of course you never know what life might bring!)

we did it this time last year op 5% deposit and both in our 40s with 2 kids. We have a high mortgage so no holidays or expensive xmas presents here at the moment.. We do now have peace of mind that our home wont be sold from under us and like you say its nice to decorate to how we like .

@pavillion1 did you stretch to the max or had to compromise on property to keep cost down?

We stretched as we know it'll make us money in the long run