What is the market going to do, crystal ball gazers?

[TinyTroubleMaker]

I'm about to buy a house. Not for the first time, already had 2 fall through in so many years.

Spoke to a colleague, he immediately advised me not to do this - top of the market, bound to be a crash now, you don't want negative equity etc.

But I've been hearing this for literally the entire time I've been looking. Including when covid hit and actually prices sky rocketed.

So what's the likelihood he's right this time? I'm in no hurry to buy this time, it's not my dream home but it will do for a while. Don't want to make any decisions I regret in either direction.

Following as I am also buying and interested as to what the responses will be

hard to say - but with inflation rising, energy bill rise , food bills going up.

I think a small adjustment down but not a crash.

Up a little, especially if the BOE do relax the lending stress test. Habito and Perenna are lending 7x salary to some people. Prime London is on the up too.

It’s your home, assuming you’ll be there long term and don’t want to flip, you’ll be fine. You can’t guess the market. Prices are high but they don’t show any sign of reducing any time soon. 4-5 years maybe flatten out. How much would you spend in rental during that time?

It’s a very odd time , it’s like trying to avoid double edged knife. My friend bought in 2007 at the peak of the property bubble before 2008 crash. She paid 525k and now her property is worth 750k . People who bought on the same street after the crash paid 425- 450k and their property is still 750k. If you are buying for a long term then negative equity will eventually become positive but will take some time. Alternatively property prices may just stabilise without going down so you may stay at the same equity level for few years. Good luck 🤞

I think far more people have been left behind by the market waiting for it to crash than have been left in negative equity.
If the market crashes banks stop lending so FTBs don’t benefit, only cash buyers do!

In the long term prices always rise.

It's a weird time. We bought in 2014 (a London flat) and are now trying to sell it for less than we paid with no success. Meanwhile houses are racing up... we are stuffed as we have two children now and really need a family home.
I'm fed up of it all.

Its very hard to say. What are you aiming to buy? You need a home, but what does do for a while mean.

How long is 'do for a while'? I don't think we'll see the big price rises continue, but I don't think they will crash either. Even if they fall, they will go back up again eventually, so as long as you are not in a hurry to move, negative equity isn't an issue in the shorter term. Of course depending on your deposit they could fall a fair amount without being in negative equity anyway, and depending on how much your rent is you could still end up being better off buying even if prices did drop a little.

As long as the mortgage and running costs are affordable, and you're planning to be there for a few years, I'd not worry too much about what house prices are doing.

My dh and I bought our first house together 2009 and there was a slight Dip. We got the house for £250k instead of £275kThat was under the old Stamp duty rules when £250k created a bit of an artificial price cap. In a buoyant market people would have paid £275k

I suspect there might be the odd bargain to be had but I don't think there will be out and out price crashes.

Also unless you are living with parents for free surely it better to get somewhere and start paying off her mortgage.

Buy now before interest rates shoot up. That will be a trade off against any house price lowering that MIGHT happen. If it doesn't then even better.

Market will keep going up for at least the rest of the year. Economy is doing pretty well and interest rates low for the forseeable, also plenty of mortgage deals. If there is a correction it will be that, not a crash. People so busy waiting for a crash they miss out. Always remember buying a home should firstly be as somewhere to live, not purely as an investment vehicle.

If you dont plan on selling anytime soon it doesn't matter.

www.economist.com/finance-and-economics/how-long-can-the-global-housing-boom-last/21807002 Good article! Better than paying your mortgage money in rent to a landlord!

I know it varies around the country but in my area (southwest near Bristol/Bath) there is just nothing coming on the market so anything that does come on is snapped up almost immediately. I have never seen so little for sale on Rightmove! And the rental market is even worse.
There are far more buyers than sellers at the moment and as long as demand continues to outstrip supply, prices are not going to fall even if they don't go up by much either.

I've said it before but I'll say it again. In the long term, property always increases in value.

We had a few people earnestly telling us not to buy as a crash was due imminently. This was in 2002, and we thought they were probably right (but ignored the advice anyway, luckily).

My prediction - there might be a dip, but that's all.

@Eve

hard to say - but with inflation rising, energy bill rise , food bills going up.

I think a small adjustment down but not a crash.

I agree that things will calm down and there might be a small reduction but I can’t see prices crashing. You need to live somewhere so need to look at what rent would cost in comparison to a mortgage and buying costs. How you’d feel about not being in your own place. If you’re going to stay in the house for a good few years I’d go for it.

No sign of a crash down here - although I am seeing a far greater number of reductions and the dross is hanging around, unlike last year. That said, I've just seen one house that took a while to sell last year at £235k (and presumably then fell through/got withdrawn) is now back on at £300k prices have gone up here but not by that much, and I expect to see it reduced in a few weeks' time. It's just pure greed and makes me loathe estate agents even more.

My crystal ball says house prices are going to stabilise, they won’t rise much and they won’t drop much. Despite stabilising, some people will struggle as interest rates will rise and inflation increase.

Don’t wait to buy a house, but don’t push yourself to the limits.

London is excluded from Crystal ball as there is no reception south of Watford Gap.

All opinions are my own and not based on any professional knowledge.

Buy well, fix mortgage for a long period 5yrs+, don't be at the absolute limit of your spending, and I'm positive you will be ok whatever happens.

I cannot see see the market crashing. My sister is house hunting and can’t even get to view some properties as too many people want to see them and every viewing slot gets booked up. Houses are getting 5-10 offers, many over asking. When there is so much demand how would the value suddenly plummet? In a sought after suburb of Manchester.

@TeenTitan007

Buy now before interest rates shoot up. That will be a trade off against any house price lowering that MIGHT happen. If it doesn't then even better.

If interest rates "shoot up" then prices will definitely drop. House prices are simply a function of what people can afford to borrow. You're better off borrowing less money at higher rates, than more money at low rates.

I own (mortgaged) my own house, but I'm bearish when it comes to house prices. I'd like to see them drop to give people the same opportunity of affordable prices I had when I was a FTB. Saying that, I've watched consecutive governments do anything to keep prices high as they don't want to lose older demographic votes. Everytime I think house prices must drop, another artificial prop is put in place. The laws of basic economics don't seem to apply anymore. For that reason I would go ahead and buy.

However,