Is this a bad time to buy?

[ChickensGoMeh]

We're looking at part-exchange on a new build (I know, I know, but we love it and it's in a great area). I'm just wonderign what people think re the market at the moment. The house we're looking at is reasonably priced for the area, and the offer we've been made for the part-ex is also reasonable (on the low end of reasonable, but to be expected). We don't have to move, but want to.

Well we had an offer accepted on a place on Friday so we are buying :)

At the end of the day you can only do what you think is right for you and your family. If it is right for you and you ahve got a good deal then why not go for it. Especially if you plan to be there for a few years or more.

I think I'm a bit angsty about increasing the mortgage. But moving in to a bigger property will, naturally, cost more money. The bastards won't give it to us for free . In those terms, perhaps it makes no difference as to when you buy

If you can afford it and are looking at a move for the long term, I think now is no worse time than any tbh!

We have recently completed on a house that we hope to live in until the dc fly the nest. We have no doubts having house hunted seriously for the last 12 mths and looking at right move for longer. My mantra is that you need to know the Market well to know whether any house is a fair price or not.

It depends on what your priorities are. On a purely economic basis, now would be an awful time to buy in my opinion. Consider that generally (with a few exceptions) prices have been falling, even with the assistance of countless Government props; but these are temporary and are starting to be withdrawn.

For example, the first-time buyer's stamp duty holiday will end in March - think how many FTBs will have brought forward their purchase and thus how few there will be after this ends (to give you an idea, transaction numbers fell by over half after the first stamp duty holiday ended ).

We also have Local Housing Allowance being reduced, which will reduce rental yields and disincentive Buy-To-Let. And on top of this, we have rising unemployment, inflation and benefit cuts eroding incomes. And to top it all, we have the possibility of another severe credit crunch (remember prices dropped by around 20% in 2008/09 during the first).

Of course people will always say it doesn't matter as long as you don't intend on selling for a while. True, but what happens when you come to remortgage and don't have sufficient equity for a decent rate, or you have to relocate for work or other reasons? Also, I'm sure that wouldn't be much consolation to those in Ireland knowing they could have bought an identical home for half the price if they hadn't bought at the peak of an obvious bubble.

Like I say, these are the economic arguments (and I come at this primarily from an investment perspective) but of course buying a home is about more than that. Just as long as you don't view it as a particularly savvy investment - those days are long gone as far as I'm concerned.

I completed on a house just over a week ago. There were two other prospective purchasers but neither could sell their own place. If you will be able to manage financially after the move, bearing in mind that interest rates are low and can only go up, then I would say go for it. Forecasting is not an exact science but commentators and experts seem to think that rate rises are not on the cards any time soon (I am not an expert BTW). You also have to factor in solicitor's fees, EA fees if any, stamp duty if applicable, new appliances if needed etc (this can come to several thousand).

I'm with alabamawurley on this one and OP, you yourself have said you are scared about taking on a larger mortgage. There is only one way for interest rates to go.

The financial mess has just started as far as I'm concerned. More and more people are on the precipice and it's going to get much worse: jobs are being lost every day.

I think you will sleep better if you decide to stay put for a year or two and see what happens in the market. I think you'll see prices coming (crashing perhaps) down.

Prices are likely to come down depending on where you are - I think (hope?) parts of centralish London are reasonably well insulated. But there are all sorts of life style reasons why you need to move at a certain time, and you can't always wait til the economic circumstances are right - especially as this particular "recession" could be with us until 2015.

If you go for a 5 year fixed mortgage at least you will be insulated from interest rate rises which look certain to happen at some stage over the next year. You won't get as cheap a rate as a tracker but will be secure in your payments.

Thanks everyone. We've wanted to move for ages (think years) but circumstances have been against us. Now we are in a financial position to move, have found a great house, but I'm keeping one eye on the news and thinking 'Fuck. The economy is bollocksed. Maybe we should stay where it's safe and guaranteed to be affordable'. Gah.

I agree with Alabamawurly & Curtainmyself

go to housepricecrash.co.uk for views on why you definitely shouldn't buy in the forseeable future.l

If it is an awful time to buy, it is also an awful time to sell, when the time is right to buy!! Vicious circle if you already have a property that you need to sell at a decent price in order to buy a new one! So from that perspective it does not matter.

If the circumstances are right for you, and you will not be massively overstretched, then I'd go for it. Extra space is lifechanging!

And bear in mind that the doom-mongers at housepricecrash have been predicting catastrophe for at least 6 years. Since then, we have bought and sold two houses, and prices round our way have gone up by about 100k. If I'd listened to housepricecrash, we'd still be renting. And for the house we are now in, the rental would be about 500 quid a month more than we're paying on the mortgage. No website can tell you what will happen in your local area and for your particular financial circumstances.

The thing is prices should have fallen but the govt did everything to maintain it. I have also bought sold and renovated about 5 houses in that time but I do think now they will fall. The situation is dire the times reported on sunday that last year only half of all sales completed. I am looking for somewhere atm to live in and prices are getting lower and things are coming back on all the time. If its a house for life offer low and just get on with it as we all have to live but if it will compromise you financially I would wait a year. Or offer about 15% below to cover yourself.

Exactly - the government have been propping up the housing market - once interest rates finally go up I reckon it will all hit the fan big time.

They do say if your offer isn't low enough to be embarrassing then it is too high.

I have been looking at flats at 300k since sept. I am in the southeast. Since the new year all of them have been reduced to 250k without exception. I really like one of them and another could be nice but I am going back Thursday and whichever one will take closest to 210 I will buy it.

If you plan on staying long term, and can afford it if interest rates shoot up, then I'd say go for it. But I think it would be a really bad idea to stretch yourselves and definitely don't expect to make a profit and trade up again.

Exactly. We're moving cause we need the space, but would only move for a house that could potentially do us forever, apart from anything else it is so bloody expensive to move! As such, house value drops don't worry us overly at the mo.

That said, the market is moving pretty quickly round us.

I am also of the opinion that the housing market is in a huge bubble which will go pop at some point!!!!!!!!! (when! oh just tell me when!)

Have given up putting life on hold however, and have an offer of 16% below asking accepted on a house that has the potential to give us a significant improvement in quality of life and a long term place to bring up the children. It is a very difficult and nerve-racking decision as I just know we would be incredibly lucky not to lose out on the purchase should we need to sell in the next 5-10 years. Tempering that is the fact we can easily afford it, it is in a lovely location with good connections, and hoping that any falls we might endure will be reflected in the market as a whole so should still be in a good purchasing position.
I would second the good advice to the OP here from Noddy & Curtain. Now is not the time to over-stretch. Push for a comfortable deal by all means but don't over-stretch. Negotiate strongly to get the house you want. If it doesn't suit the vendors then walk away.
Alabama - did the Irish not overbuild hugely which has exacerbated their problem?

mylovelymonster - yes they did but contrary to popular belief so did we (albeit not to the same extent) - at least up until around three years ago. And similarly there was very little if any mention of the housing surplus in the media in the years leading up to the Irish bust. Well done on getting a decent reduction btw - far to many lightweights here who are proud of themselves for managing to get it at asking

Libelulle - in fairness to those at housepricecrash, as far as I understand it, they were saying that the rise in prices was not sustainable and that proved to be the case. Just because the Government has spent an enormous amount of taxpayers' money delaying this doesn't make it any more sustainable, and as per my original post, this support is temporary and beginning to be withdrawn.

alabama , yes I do take their point. But the amount of miserabilism on the site just gets me a bit - it's a style rather than a substance problem I have with them! There's too much gloating on their messageboards at the 'stupid fools' who are buying now (or ditto for the past six years). From our perspective, we bought not for profit but because we wanted a house to live in, could afford it and were fed up with the insecurity of renting. We knew prices might fall and went with it anyway, and are now lucky enough to be living in a hopefully 'forever' house. Waiting nearly a decade or more to buy, as some of the housepricecrashers seem to being doing, just for the satisfaction of buying at the bottom of the market, seems a pretty grim way of proceeding really!

If you have a house and a mortgage already and you are moving to somewhere with a mortgage you can comfortably afford then the risks are surely fairly minimal? You are going to have to take a hit if prices fall wherever you are. We have been thinking about downsizing recently, as our youngest sonis seldom at home and will be off to uni next year. I know what our 4 bedroomed house will probably fetch but have been very surprised that the 2 and 3 bedroomed houses I have looked at are on the market at the price we think our very nice house will sell for - still a lot of unrealistic expectations out there.

If you want to move for a better quality of life and you think you can afford it (and have factored in an increase in mortgage rates in your planning) then go for it. You've got a guaranteed buyer for your property who is probably not going to arse you around so it should be a relatively stress free transaction. I don't think you'd find a better scenario at the moment. Yes, you're not necessarily getting the best price for your house but then who is at the moment?