Is it a good idea to buy now or wait until 2023?

[onthefencesitter]

My flat is on the market and actually I was planning to buy a bigger flat. However, the bigger flat I was looking at is in the process of going under offer. There isn't much on the market?

IF prices fall, is it better to wait until next year. Yes I risk selling lower, but at the same time, hopefully the next step would be lower? Unless of course this means I can't sell at all?

This is in London btw.

I’ve stated on here two years ago what happens in a inflationary financial environment. It’s not a popular view on here.
We had the froth from the stamp duty holiday which caused a mini boom (which I also anticipated) but real estate is like an oil tanker (again as I described previously) and is usually the last asset class to turn.
There is a lot of ‘belief’ in the housing market because it effects the most people. Most don’t dabble in the likes of stocks and shares (even though their pension is most likely invested) so there’s often emotion tied up into the ‘belief’ that their house is ‘worth’ a defined amount. It is however just an asset class that is susceptible to the wider global economic environment as much as everything else.
The US data led the way, then Australia, Canada and now us. The market has turned. ‘Supply and demand’ is the usual reply. Its true but the incorrect ‘supply’, it’s money supply that drives house prices.
Interest rates will continue to rise and money supply will become increasingly constricted. Inflation isn’t going away unless they pull a Vlocker (despite what politicians say), and interest rate rises are going to have to rise quickly and steeply.
It is more beneficial to upsize in a falling market, but so far house price ‘growth’ year on year has just started to reverse. For any declines to filter out into the market may well be into the next year, and any bottoming could be 18 months to two years away (but that’s dependent on where the global economy is then).

If prices drop then it's better to buy and sell at a lower price. In simple terms, 5% (hypotheically) off your higher purchase price and 5% off your sale price, means you take on less debt on your next mortgage. Conversely if everything goes up 5% you take on more debt and pay more in stamp duty.

Price rises don't benefit people who treat property as homes, and just want to love and have a decent standard of living.

Whether prices will drop, no idea, successive governments, historically, seem hellbent on preventing that happening.

move but we can all love as well.

House prices are dropping quite quickly in my county. We sold and relocated here from the South East in April. My issue now is how long should we wait to buy? Interest rates a rising, and there’s nothing new coming on the market.

I think if your buying and selling don’t worry because when yours goes down so does the price of the one you’re buying
mid take advantage of interest rates and get a fixed rate

Government props can’t stop monetary cycles. Central banks are independent from government policy and it’s their main role to protect the national currency.
The last inflationary cycle we had was 40 years ago. What’s worked to prop up post 2008 won’t work again. The government will have a hell of a lot more to worry about, like servicing the national debt with increased interest rate rises and skyrocketing public spending.

'Whether prices will drop, no idea, successive governments, historically, seem hellbent on preventing that happening'

As @Lightscribe says, there is very little that central banks/ governments can do now. In 2008, they lowered interest rates to zero and embarked on a massive QE fest (and have continued this ever since to support the ailing economy). The can't lower interest rates further in an inflationary environment (current rates are about 8% negative in real terms anyway). If they lower interest rates currently as other countries, particularly the US, are raising them, we will end up with a sterling crisis. If the embark on more mass QE, we will end up with hyper inflation. The politicians seem absolutely clueless but at least the BOE has (some) independence.
It's inevitable that house prices will fall, possibly by a considerable amount, depending on what happens.

I guess this is why they are looking at 50 year mortgages. I expect some stamp duty tinkering as well at some point.

www.telegraph.co.uk/property/uk/tsunami-repossessions-will-hit-house-prices/
"Government failure to provide support for struggling homeowners will trigger a “tsunami of repossessions” which will damage house prices, experts have warned. Measures to help homeowners on benefits have failed to match the Bank of England’s six consecutive increases in interest rates since the end of last year. The issue relates to the “Support for Mortgage Interest” payment which helps homeowners unable to work cover the cost of their loans. The SMI rate has remained fixed at 2.09pc since April 2021 while some recipients have seen mortgage costs dramatically increase since December – and face a growing risk of defaulting. Some 13,000 homeowners receive SMI and wide scale repossessions would pose a major risk to house prices, experts said. If all of these people lost their homes, that would equal the number of repossessions in 2018 and 2019 combined".

if there is going to be a stamp duty holiday, it may be worth waiting for that as even the large flats in my area did not go up during stamp duty holiday and I would be paying £20k in stamp duty

There will be no more stamp duty holidays. the coffers are empty.

I think we are in for a bumpy ride....

Energy prices and cost living, mortgage rates going up, added to the Brexit mess and a government that seems unable to act and grasp the emergency of the situation means disaster.

High energy prices don't just affect individuals they also affect businesses and the economy is about to take a nosedive, at least for a while.

Unless the Tories wake up and start taking control of the energy prices everything is going to be affected, including the housing market.

But if you are selling a decent property at a reasonable price you should be OK in term of finding a buyer.

@onthefencesitter I can see it more for downsizes or FTBs

FTB already have stamp duty relief for first 300k. I paid a few thousand pounds in stamp duty which wasn't a huge deal. For downsizers, it makes sense but my impression is that most older people are not downsizing. Its not just the cost,I think they prefer having larger houses to have the grandkids over. Even my MIL who only has state pension to live on once she retires is not considering downsizing. She has this idea that if and when the youngest moves out, she will rent out rooms.

Apparently a big reason older people don't want to downsize is because of stamp duty costs. Also the bigger the house the bigger the heating costs.

can't they just close off the rooms they don't use?

I'm not sure that will be enough to help everyone.

good way of letting the house get damp

It all depends on the area and the type of buyers....we are in east london area...very popular with the young couples with children....we have been here over 30 years....they are fighting over anything that comes up...sealed bids still going on etc....bank of mum and dad sloshing the cash out....prices not falling at all here....

A relative of mine is trying to sell a flat in North London and hasn’t had much interest. It seems that prices for flats there have already fallen. Houses might have held their own, though. I’m not sure.

It has been falling since 2017. tbh its how I managed to buy my flat in the first place in 2019. I bought my flat from an ex landlord. But it also means I will have to accept a lower price if I do sell in the next few years but it may not matter if I truly can get a bigger flat for a cheaper price. My rationale for buying my current flat was that I wasn't likely to get a 3 bed flat for 500k in an area in london that Dh and I could agree on (and is also near to my MIL) so I might as well take advantage of the stamp duty relief. Also was living with family at that time and wanted my own space.

But its hard to know what to do at this stage. I have put my flat on the market and adopting a 'wait and see' approach. Not in a rush to sell. But would like to move before I TTC and given I am 30 in October, I know I can't wait forever...

My mum who is in her own now house far too big for her
got it nice everything as she wants all big jobs done a few years ago

there is zero benefit to her down sizing it would cost her between 15 and 18k to move then she would have to spend on it to make it as she wants it
The money it would cost to move would finance the running of her current house compared with a smaller one for at least 10 years

how many beds does your relative's flat have?

My position is I own (3.5 years left on mortgage) a house, its value has risen, but I would prefer to see prices drop, ever increasing house prices choke the wider economy with people servicing larger and larger debt. I'd like everyone to have fair chance at home ownership like I had when I was younger.

While the government can't stop monetary cycles agreed, they've kicked the can down the road for a very long time with this one, help to buy, interest rates at life support levels, higher borrowing multiples x 2 earners, throwing cash at people, moving borrowers to interest only rather than repossess, mortgage holidays, etc etc. We're over due a bust.

However, we haven't seen 50 year mortgages yet, or perhaps inter generational mortgages like Japan where upu can pass debt to your kids. It stinks, but I wouldn't be surprised to see these props. Hence I gave a solid prediction of "no idea".

@rwalker Im not sure why you are replying to my post telling me about your mum?