House prices when you are already on the ladder

[user1489844432]

Hello

I was planning to move to a bigger place before Covid19 happened. No steps taken yet just planning.

Everyone expects price drop in months to come and certain ppl put their house hunt on hold or even pull out from the existing process due to fears of overpaying etc.

Am I right thinking this should be more applicable to FTB or investors?

As far as I can see if prices go down my house will be worth less but also house I buy is worth less etc. So there isn't any need for me to wait much longer after the lockdown with purchase or am I missing a trick here? I was FTB before buying current property so not much experience.

It will depend on your mortgage
If your house is worth £200k and you have no mortgage and then prices fall so your house is worth £150k then you are right, other prices will also drop so you will still be able to afford a similar house
If your house is currently worth £200k and your mortgage is £180k but prices drops to £150k you will then have negative equity of £30k

Yes that's about right but depends how much equity you have in your house, we don't have much so we are just praying it doesn't dip so much that we don't have the funds to move. We are hoping to part exchange as soon as the developer we are looking at reopens.

I get about equity and mortgage but my question is more about prices themselves. Obviously everyone wants to sell at peak and buy when prices are dipping :) I just want to make sure I dont overpay more than anything else.

If you're buying and selling in the same area and the same time then yes prices should be impacted in the same way, but it depends on the house, in some areas long term 4 bed family houses might be more sought after and therefore sell better than in another and flats might not sell as well. I wouldn't get too bogged down in it tbh, see what estate agents value your home for and see what you can get for your budget. If your next home is a long term home over or under paying a bit doesn't make much difference.

WRT prices then yes, within the same area. If you're moving to a different area then prices will probably change to a different extent which may work in your favour. The problem comes where the bottom of the chain tends to be a FTB who are holding off on buying... There's the real killer to the market.