Housing market...do we pull out?

[Misscf81]

Me and my partner are currently in the process of buying a house, but with everything that is going on, we don’t know what to do.

At the minute, nothing has been signed...we have had the valuation done, and are awaiting a homebuyers report back (I am told it should be today). However, we are beginning to panic about the current climate, and equally what the long-term impact could be. There’s been no change to our current employment situation, but I’m terrified we are going to take this house on and either one of us (or both) will be out of work soon, or we may end up in negative equity as the market may crash and house prices/valuations decline.

What makes it worse is that we know this house needs a bit of work (how much work depends on the homebuyers), and I’m worried that we will move in, but won’t be able to afford to do the work anything happens with our jobs.

I feel bad on the vendors, as they are obviously panicking now, but I just don’t know what to. Last time anything like this happened was 2008, during the financial crisis, and I had to change career and move cities. I just don’t know whether stay put in our rented flat until all this blows over!!!

We’re the same! Honestly, I think we’ll stick it out. Not because I feel confident, but because we’re not planning to sell for a very long time so any hit the housing market does take won’t necessarily affect us (other than make us wonder whether we could’ve bought the place cheaper).

Lots of people on here doom-mongering, which is understandable, but surely it’s about confidence in the market - and if all house buyers wobble at once that’s what’ll send prices plummeting?! I’m no expert, but...

Live overseas but same situation here. I'm a SAHM and husband is a lawyer but who knows what's going to happen over the next few months. We are buying our "forever" home so are also minded to push on (that's if our mortgage doesn't get pulled )

I see what you are saying, but what if your landlord decides they need to sell? I don't know your situation, but is your rental safe? How do you pay rent if you lose your job?

DH and I have just moved in to a renovation. If the price drops, it drops, this is our home. If we run out of money and it takes a while to get it to where we want it, then so be it. It's ours.

Depends on what profession you are in and how risky it is in the current crisis

People have been talking about “waiting to buy” since we bought our house last January. If you decide to wait, who knows how long you will be waiting and how secure your rented house is, if your landlord decides to sell you’ll have all the cost and hassle of moving. We’re so glad we took the plunge and decided to buy despite brexit looming, our house has increased in value and we have the security we were lacking when renting, we have no regrets at all.

Saying that if your jobs are particularly at risk (we both work in the NHS so don’t really have this issue) then I would wait as the cost and implications of breaking a rental contract are a lot less than defaulting on your mortgage.

So

Can you afford the mortgage?
Can you afford it on one salary?
Is it less than your rent?
Will you be there long term
Do you love the house?

If so, do it. You need somewhere to live so owning versus renting is still probably preferable.

And if the price drops, it’ll still likely be ok if you’re there long term.

Thanks for the feedback. Neither of us work for the NHS, so not particularly risky, but it depends on the impact. I am Head of Marketing for a technology company and OH works in sales.

We have had the homebuyers report back today and there are lots of reds and oranges flagged up....hardly any green. It’s looking like all the double glazing windows need replacing throughout, repointing, rewiring and new boiler and central heaters, plus new floorboards on some rooms....it’s beginning to feel like a lot of work, especially when we did not want a project. Plus, this was never going to be our forever home, just somewhere we could stay for a couple of years, and them love on.

Thoughts?

*Move on

I think you have already decided OP.
It needs updating, you don't want to do it, so pull out.

I think it doesn't sound the right property at the right time. Start looking again with the aim of finding somewhere else.

We have had the homebuyers report back today and there are lots of reds and oranges flagged up....hardly any green. It’s looking like all the double glazing windows need replacing throughout, repointing, rewiring and new boiler and central heaters, plus new floorboards on some rooms....it’s beginning to feel like a lot of work, especially when we did not want a project.

That's a lot of expense if all the work does actually need doing! You could negotiate on the price but personally I think I'd continue renting for the time being as house prices are likely to come down drastically as it looks like an economic recession is inevitable.

It sounds as though your cold feet are less due to the virus and more due to the state of the house. If it’s not the house of your dreams then don’t risk it.

I wouldn’t buy now. I’d wait.

Even ling time employees with years experience in large multinationals that until a few weeks ago had robust stock market values - are worried. There’s a global recession looming now because of the virus disrupting trade, stock markets were crashing. Many companies, small businesses etc will not make it through this crisis. Many people will lose their jobs. This will have knock on to property market here.

Houses prices will drop. If you buy now, you could be left holding a property worth far less than your mortgage. If your jobs could become at risk (indeed if you lose your job), you’ll be in a world of hurt.

If renting, you could claim benefits for your rent.

I’d hold off for now if you can.

All very well saying to buy when (if) houses are cheaper, but won't people remove their houses from the market unless they have to sell? Surely you'd end up with a ton of buyers and not many properties to buy as we've seen with the brexit situation?

If there’s a lot of work to be done, factor in that availability of tradespeople might reduce if they are self-isolating (or, indeed, unwell).

DH and I are first-time buyers and we've decided to go ahead with our house hunt/purchase, but with the following 'measures' in place:

• Getting a mortgage that we can afford on either of our salaries
• Having 6 months of mortgage payments in our savings, after deposit and fees are paid
• Not buying a property that can't be lived in as is; it may look ugly or need a wall knocked down for better flow, but it will have to be something that doesn't need essential/structural work done.

My in-laws were in negative equity during the last recession. They said that their house fell 30% in value. But they said that they had bought a place that were happy to live in for as long as it took for the market to bounce back, which it inevitably did. If you're buying something for the short term and hoping to sell on in 5 years, that's risky. If you're buying a 10-year home but would be happy to stay in it for 20, I think that's a good bet.

Just my 2 pennies' worth

Having being stuck in negative equity in the 1990’s I would exercise caution..

The housing market is not going to crash.

The circumstances that caused the crash in the 90s were not a global pandemic. They were due to bankers up selling bad debts, which got out of control.

Question is, would you prefer to be paying down a mortgage debt, particularly now that interest rates are incredibly low. If we go into recession, they'll up. Or would you prefer to continue to pay your landlords mortgage?

If youre concerned about jobs, make sure you take out income protection insurance, simple.

Our home buyers report was similar. The house is still standing and they're designed to flag the very worst case scenario, but are any of them things that would actually stop you living there in the meantime?

Agree with another pp that if it's not your long term home I'd wait. We lost 25% value on our first home after the 2008 crash, my brother lost 50% (both quite low value properties in the North). It took me and DH 7 years to dig ourselves out of negative equity and lucky prices rose for us back to nearly the same value by the time we sold in 2014. But my poor brother's flat never recovered so he sold at that loss. It was a disaster for us both financially. So be very cautious. Recession is coming

Recession definitely, depression likely, negative equity from here on now certain I would say

Recession is coming. No doubt about it. Housing will get hit but not clear how hard as there is still a shortage of houses.

Your not looking at long term home pull out . If it was long term I would go ahead as what you lose in equity you would be paying in rent.

Just to update you, we pulled out. Felt gutted for the vendors, but there was about 20K worth of work to be done, plus our 18K deposit, it all got a bit scary. We have another dilemma now....a house we fell in love with, and lost out on is now back on the market...but because of the rubbish timing, I’m not sure what do...offer it not!!! Argh!!’

This is why we need a system like Scotland. Putting an offer in on a house is not like bidding on a nice dress on eBay. When you offer on a house and then pull out you are causing untold distress and costs to the person whose house you've offered on.

Unless you're buying a new house, then most houses will require some work, it's just a reality. Most houses are priced with this in mind.

I think all houses should stay on the market until you exchange contracts or offers should be binding except in exceptional circumstances. But that's OK for you, isn't it. You've not just suffered the heartbreak of having a sale fall through under your feet