Would you buy a house now?!

[SaltySeaAir]

Just went to see a house that we both like. Husband thinks it's a rediculous time to buy a house. He thinks prices are inflated at the moment due to stamp duty holiday. I don't know what to think anymore. We've been renting since June, I'm desperate to get settled, he would rather wait a few more months and let the market settle. I'm so over moving house now 😭

Depends what you want, some types of property are starting to be reduced. Stalk your local market!

This is potentially the worst time ever to buy a house.

However we have just bought - we have been looking for years now and this was the first house which is 99.9% good for all the schools we want, walkable if needed, the best layout, garden, parking, no alleyways, in no chain and we both liked etc. It is in very bad condition though, have costly hidden issues and we paid way over asking to be able to get it because of the stamp duty holiday (other bidders all had to sell).

On the other side our mortgage and bills are now half of our rental and still there hasn't been nothing comparable on the market since then. Based on the recent couple of years of experience we had zero chance to find something which is at least vaguely this good, there was none since we have been looking.

I know we will lose money as prices WILL fall, but in the end stamp duty hols saved us some money, the difference between renting and owning saves us 5% of the paid value, so even if prices are down 15% in 17 months time, we hardly lost anything. If prices are down 30% then we lose 15% that's true.

But on the other hand in that 17 months we could lose our jobs, get ill etc. and then maybe we'll never be able to buy, or even worse just live in this area as if we cant keep up with the rent payments we are getting kicked out from the rental and with a bad reference we cant even rent here, its quite competitive here.

Plus there is the added risk of who knows what happens, maybe there wont be nominal drops at all, wage inflation at the moment is 3.6% or something, if it keeps up it can underpin nominal prices and we dont know how much money they will print, maybe wage inflation will be soon 5 or 10 percent, then prices will never fall.

So while it is a very bad time we just bought and get on with life - I will however never forget the creators of the current situation and will vote accordingly.

@DelilahDingleberry

Those saying interest rates will rise - why do you think that?

Mainly because it's something meaningless that sounds good on a property thread.

There's literally no reason for interest rates to rise, at least not in the short term and certainly not 'like we've not seen for a long time'. Plus all lenders stress-test your borrowing at higher rates much more stringently than they did before and if you have a decent deposit you can lock in a good fixed rate for 5 years anyway.

But it doesn't stop people wheeling out the old 'ooooh I had to pay 15% rates 30 years ago so I'll piss on your chips now' because...that's what people on the internet like to do

Yes, there’s never a ‘right’ time. Bought in 2007, ultimately made over £100K when sold last year and now buying again having been in rented for a short time. Tidy deposit so some cushioning against negative equity if that were to arise. Fixed mortgage at a super low rate for 5 years. To all those saying interest rates will rise, look at what the banks are offering. 10 and 5 year fixes at 1.5% or lower. That tells me the low rates are here to stay for a long time yet!

Keep hunting!
Markets slowed in my area, a lot of houses still up for sale and not gone within a day, some being reduced.

We are in the earlier stages of buying our dream house currently, paid over asking by a bit but it it likely to be our home for the next 15 years if not forever. There wasn't anything else that has compared coming on and we're happy. Locking in for 5 years at 1.54% too in case of interest rise.

As a previous poster has said, we are buying now, while we can, to get out of the rental trap. If anything happens to our jobs, health etc we may not be able to get a mortgage offer again in the future. Or we may be priced out. Plus the demand for rental properties has also massively increased (plenty of sellers having to go into rented because they can’t find a house to buy or to break the chain and avoid losing their buyers). It’s already very expensive to rent where I live. We recently took out a personal loan to replace our car and the checks the loan provider did for that were extremely in depth compared to what has been the case in the past. Not sure how east it’s going to be to borrow money in the future. So we are going for it now, and as FTB with no chain on either side it should be fairly quick. But tbh if I already had a house/mortgage and didn’t absolutely have to move, I’m not sure I would right now as it seems to be very hard to keep your buyer and find a house to move on to at the moment, very stressful.

If the area you’re in has a strong housing market it’s unlikely to ever stop by much and far more likely to keep climbing. I’ve owned property for years and in the medium term it’s only ever gained in value. It’s one of the best investments you can make, just choose wisely. If you look back on here posters have predicted drops post financial crash, Brexit, covid (plenty of doom mongering posts in March last year) and yet its risen and risen. It’s also unlikely interest rates will rocket, the lenders have been happy to offer very low rates for 5,7,10 year fixes.

I don’t think prices will fall. Stagnate for a bit maybe, but I can’t seem them being allowed to fall, it’d be catastrophic for the economy.

I’d be worried that by renting for a while, you’d be priced out of the market, but that might not be a concern if you’re cash buyers.

Yes I would and judging by the market thousands of others agree! If you need to move you need to move. Maybe not the best time to move on a whim. Although we moved on a whim in July, so it all happened during covid but probably before things really soared. We just got new neighbours yesterday and houses are flying here. So yes. Do it! Exciting!

Keep looking - no harm in that. I don't think prices will drop but the increase may slow (but still go up). Interest rates are predicted to stay low for the next couple years, but one should always anticipate it riding, though presumably your earnings will have rusrn too, and anyway you say you will not be borrowing much.
Your dream home may come up next week.

Thanks so much, great advice. I have been watching the market very carefully for the last year here (just outside Bristol) and it's very hard to say what's happening at the moment. I think the pressure might come off as the stamp duty holiday eases, whether more properties come on the market I have no idea. I personally wouldn't pass on the dream house, I'm hopeful I can convince my husband of that. There were a few compromises on the house we saw today, so I think waiting for now is the right thing - fingers crossed it won't be much longer!

I would definitely look to move now if you need to move. Just be sensible about your offers and make clear what a strong, proceedable position you are in.

I am looking now, and it seems there is less stock coming to market, though prices are broadly holding steady (I've seen a few reductions, but they were ridiculously overpriced in the first place). Lock your mortgage in to protect against potential interest rates rises; I've seen some good 5 year deals, though some lenders do go longer than that.

If you're currently paying £1,500 per month in rent say, in a year that is £18,000 you would have nothing to show for, whereas if all your payments were going towards a mortgage, a good proportion would be paying off your equity, and you'd build equity over the years to come.

Move now.

If you can afford it now then buy it now. It is a gamble to think it might be easier / cheaper in the future. The opposite could happen and in the future you won't be able to afford the house you like now.

Just make sure it is a home you will be happy to enjoy for a number of years.

Good luck.