If you were FTB and could buy tomorrow, would you?

[pannikin]

We are in the above situation. Mortgage application being processed as we speak (well maybe not literally, as it’s Saturday night..), deposit funds sat in our bank account, house lined up.

Have ventured onto a few threads tonight regarding Brexit/property prices dropping, and now worried we may be making a mistake. We have saved up for a long time for this opportunity, and have also been fortunate to receive some gifts from parents. I knew the interest rates had gone up, and we were happy to proceed on that basis particularly as we are applying for a relatively small mortgage (under 90k) and we really want the security for our DC after years of renting.

Would you be buying now, if it was your first chance? We are aware there may be uncertainty after Brexit which may negatively impact our opportunity to get on the ladder, which is why we’re acting now. I’m worried we’ve got it wrong!

We're definitely not looking to make a quick buck. This will be our family home, no plans to sell it.

We are buying in the north east where prices are relatively low

Not relatively! They are low! You will gain stability, you won’t have to worry about a landlord and you can make improvements!

Yes, there is uncertainty over mortgage rate costs but that was always part of normal life until 10 years ago!

I am so ancient, our first mortgage was limited to 3x DH income at 15% and 1x my income at 18%. That was in the good old Labour Govt days of 1978. It obviously limited what we could buy! I really doubt any of us will see that again but it’s all relative to earnings and purchase price. Our first house was £19,995. We have become accustomed to low interest rates but it’s not going to last forever.

I bought last month.

My mortgage is less than £300pm. Rent would be £500 minimum here. So I am saving £200 per month. If interest rates go up, rent goes up as well as mortgages. If I was paying out £500pm and then it went up, I would struggle.

If interest rates go up, I can still afford the mortgage. I couldn't afford

I think there's currently a very good argument for a FTBer to sit tight for 6-12 months with so much financial uncertainty in the air.

The true impact of the 2008 financial crisis has still yet to be played out, so far it's just been papered over with money printing and ''emergency'' interest rates.

If I was currently a FTBer there's no way I could bring myself to buy any of the overpriced dregs that have been sat languishing on the market in my local area.

Yes without question.
It may go up in value, it might not. Its unlikely if it drops that you’d be in negative equity forever, and anyway none of that matters unless you want to move.

We have just moved, although not FTB and have fixed for 5 years. We may have paid too much-who knows. I love the house, it is home. Don’t overthink it, it is a million times better than renting as long as you aren’t borrowing up to the hilt.

Jemi... that all depends on how long the govt decide to meddle for. They could keep printing away merrily for a lot longer

@theunsure Its unlikely if it drops that you’d be in negative equity forever, and anyway none of that matters unless you want to move.

Not strictly true... negative equality can have a negative impact on your Ltv and so your ability to competitively remortgage.

Buy it. No question about it. And stop worrying. If you pay off a chunk of your mortgage ontop of your monthly repayment every year - mortgage might limit you to 10% and keep paying your monthly payment without reducing it, you will pay it off quickly. Then the house is yours, no rent or mortgage and you are secure. Don't back out. If mortgage rates go up so will rent.

Alexalee

They could keep printing away merrily for a lot longer

The government has stopped its QE programmes now. If necessary the next programme will be something known as helicopter money, by which newly printed money would be injected directly into infrastructure projects and tax cuts via a new Fiscal-Monetary Policy Committee (FMPC). This will prevent any newly printed money from inflating asset prices, for instance property and shares - those effects are now too politically toxic for a government to repeat.

@lulu

"mortgage might limit you to 10%" - what does that mean sorry?

Yes. We just completed and no regrets. House buying is a long term game

@Lilmisskittykat

Yes but in the 20 or so years I’ve been a home owner its not always been necessary or beneficial to remortgage at the end if the term. Even at a higher interest rate it is almost always better than renting. It’s a long game, and the security of owning is always preferable IME.
First time buyers just need to man up and get on with it and think about their home and not the money. I was straight out of uni and just made the leap, no dithering sbout what might happen.

BoE a lot of people try and get rid of the mortgage sooner then the end of the mortgage term by overpaying it. Some mortgage companies limit that amount you can overpay to 10% of the mortgage each year. Ours doesn’t but some do.

Yes, no question given that you are planning to stay for the long term.

There are people who have been waiting years for house prices to crash. In all that time they could have bought and be half way to paying it off.

Way back in 1999 I was waiting for the crash that was being predicted to be just round the corner so I didn’t buy the Brighton seafront flat I had my eye on for £60k.

Even if prices do crash if you aren’t moving then it doesn’t matter. Rental prices won’t go down that much as BTL landlords have their own mortgages to cover.

I'm a FTB and will be completing later in the month, and if I was still looking for a property I'd be still buying. I'm looking for properties that I can happily spend the next 5-10 years in. So I can ride out any property price crashes, both me and my partner can afford the mortgage alone.

Owning a property is much more stable than renting, and to me renting is empty money anyway.

Don’t get confused by all the yesses. I’d bet that most of them are pretty biased as they already own a property and would want the market to pick up again.

We have the money to buy, but prefer to wait. I think it would be foolish to buy right now. Wait a few months and you can get a better price. At least in London this looks likely.

Yes of course people are saying the price doesn't matter if it’s your forever home, but I’d rather spend less money on the house to begin with. I don’t get that way of rationalising an inflated property price.

Definitely wait.

OPs mortgage payments are half that of rent - so property would have to drop by50% to make any real impact

Even in the crash in the 1990, prices didn't drop much and are more than double now so long term it makes little difference.

Don’t get confused by all the yesses. I’d bet that most of them are pretty biased as they already own a property and would want the market to pick up again

Yes it's part of anplan all homeowners have. Get on mumsnet and tell someone to buy a house, it will get the market moving in the whole of the UK again.

I own. Have been here a whole 4 weeks. I won't be selling and can live here permanently, if I want to. It's cheaper than renting, nearly 50% cheaper. If interest rates go up, or houses prices go down....rent will go up too. With rent being so high here, a massive increase would see me homeless. An increase on my mortgage of 50% would be difficult, but manageable.

And in the meantime I am saving a lot of money each month.

There are people who have been waiting years for house prices to crash. In all that time they could have bought and be half way to paying it off.

This is very true! Even in mn there have been threads for years saying how people are looking forward to the imminent crash, that they had the money to buy but were being savvy by waiting. I am talking 8 plus years. In 8 years i would have saved 20k by owning house rather than renting.

And a my mortgage would be half way almost half way done. Assuming I didn't make any over payments.

Yes, I would.
If it's a long term house, certainly. I started looking for a house riiiiight after the referendum and I am an EU citizen.

Long term in my mind being 5 years from now.
Look there is laways a chance of market going downhill massively even was at the time when the world Brexit was about to be created. Markets go up and down. If you worry too much, you can end up never buying.

But! I would be very careful about overstrenching myself. Which I was anyway

I would be very careful about overstrenching myself.

This is very good advice. I haven't followed it in the past, but have with my latest purchase. My home is not the best house I could afford. I could have borrowed about another 15-20%. I will have to do some work but it's all cosmetic and I can do it as I go. Any major work will be a total choice of mine.

I also opted to buy just out of my oreff3r3d area, as my preferred area is very expensive. I am literally a 10 minute walk or 2 minute car drive from the preffered area.

A few years ago, I would have bought in my preferred area or bought something 'better. But then worried more about interest rates etc.

@Thatsfuckingshit lots of people buy big. It's great you are more careful now. I did it with our first. Basically made sure that everything can be paid by one wage so if anything happed, we are sorted.
Found a little area which is lovely and quiet, but under a postcode, which was keeping the prices down. So crash actually barely shows here, if anything. Then again. I am talking normal house price, on a cheapside NW England.

The people who should be worried about crashes are people who overstretched massively, people who bought with the idea of selling in a year or two, people with reaalllllllly high value houses IMHO. I can be wrong though.

If a mortgage is half the rent, it’s a total no brainier. Even if prices fell it wouldn’t be a total disaster. If you keep waiting it might seem like a long wait to shave a few thousand off the price. Obviously if you were talking £2 million, that’s different. Even the London market is still ok for the right property in the right location, priced sensibly. I think the more expensive properties are sticking and it’s actually older people trying to trade down who are most likely to suffer as they tend to need a certain price and might not have a modernised home. The correct price, location and redeeming features would help.

OftenHangry Yes! Me too! In Yorkshire actually. The next village along is £££, though. Nothing in the village under 200k. I am on the edge of the village, with a less desirable postcode.

There's only me now, so everything is paid on one wage. I do pay a lot of for insurance to ensure the mortgage is paid in the event of something happening. My life is less stressful. I do wish me and exh had been more sensible and bought smaller when we were together.

It is less stressful.
Especially because we just chill in our garden now 😁