House prices predicted to fall by 10% in 2023

[MoHunter]

www.theguardian.com/money/2022/sep/28/uk-house-prices-predicted-fall-mortgage-interest-rate

Well that's a worry when we are close to exchange and completion on our next property!? 😭But I guess even in case of a reduction next year will likely recover again within a few years?
This will be our home for a good while, probably 10 years+ until children are grown. Sh*tting myself a bit but also desperate to move! Staying is not an option as I hate the town we live in.
Anyone else at a similar stage now worrying about this??

Does it matter if you are living in a house long term? If you sell and buy another it will be reduced by 10% too (which means a more expensive home will be reduced by a greater amount).

I just completed on my new home 5 weeks ago. I knew I was buying at what would probably be the peak of the market, I also sold at the same time, but new property is a significant upsize and have taken on a much larger mortgage. However as with all markets, property, stock market etc, there are economic cycles and if you are in it for the long term then any price movements will just be a blip. Secondly your home is where you live its not really an just an investment. My rationale was that my old house wasn't working for me and my family and was making us unhappy, we couldn't have rent anywehere for the cost of the new mortgage, and most importantly I could afford the move without stretching myself to my limits so went for it. I do worry for people borrowing right up to their limits and the current interest rate crisis could cause a lot of pain down the line. I took my mortgage out over a longer timeframe than I could have afforded, so I wans't too squeezed if and when interest rates went up (that was always inevitable), or should mine or my husbands work situation changed, his work isn't very stable though is well paid, but you never know how longe each contract will last and or if the work will dry up. We intend to overpay once we have completed rennovation works and bring the term of the mortgage down and or alos eventually downsize as we won't need such a large proeprty int he future. Don't forget there is still an incredible demand for property, prices won't totally crash, but there is almost certainly going to be a correction.

It’s generally better if they fall if you’re on the property ladder. Most people upsize so you’ll be getting a better deal on a bigger house. Depends also on how much equity you have in your current house.

To be honest predictions are worthless. They (almost) always wrong so just ignore them and do what is best for you in your current situation.

Its normally the rate of growth that reduces, its often misreported

It depends where you live and where you want to move to.

Recessions aren't so doom and gloom, I've lived through 3! Nothing will be as bad as the 90's crash, Bank of England was different back then. And there no such thing as a fixed rate mortgage until 2005

The stamp duty thing will keep things buoyant, people still work and banks still like lending money

I had a fixed rate mortgage in 1997

Good, they need to fall. I'd be shocked if it was only by 10% though.

Another day reduction is a 16% reduction.

The housing market is hugely overinflated currently.

This can be a good thing unless you are simply selling and not buying. It will encourage movement in the housing market and prices will rise again in time. Fluctuations are normal and they've been on the rise for a while so a little levelling out won't hurt.

Some houses are hugely over-valued and they will fall in value in real terms.
Some property round our way has only really recovered its 2008 valuations in the last couple years - the market as a whole might have recovered quicker, but not so much some individual houses. I think the same is coming again.

BUT - you have to pay to live somewhere, and home is typically a massive part of life. For me it’s way WAY more important for happiness than what marque car you drive, or what shoes you wear or hairdressers or what you do on holiday or meals out.
So long as the interest + fall in value is less than the rent you’d otherwise have been paying then you have to consider it a wise move.

Houses in many areas are up around 10% already this year, a fall of 10% is hardly cataclysmic.

Although, with a proper recession and 5-6% mortgage rates it could easily be more than a 10% fall.

But all of these 'predictions' are just glorified guesses at best, total stabs in the dark at worst.

Good. House prices need to fall and wages need to rise. You’ll be fine OP.

Some good points being made! Yes, it is a home, not (just) an investment, obviously would be nice if it didn't lose its value by the time we sell..but as that is a long way off, and any further purchase will also be reduced, I shouldn't worry too much.
We aren't going to the limit of affordability, but it's still quite a jump from our current mortgage! 😬

10 years will be fine OP ride it out. The housing market is currently over inflated massively and I say that as a homeowner. Rubbish houses were going for bidding wars and offers over. It does need to calm down. I'm more worried about sterling tanking.

Not as far on as you- searches etc being done now, no exchange date yet. It’s not great, but we’re viewing it as a long-term move so it’s not a disaster. I am very, very glad we stuck rigidly to the price we’d worked out we could afford, even though it meant we missed out on several houses we really wanted but that we felt were going too high in a silly market. If we’d got one of them I’d be very nervous now and I wouldn’t be surprised if one or two of them reappeared on the market as they were going for tens of thousands over asking.

No they won't.

The thing is yes you can ride out recessions etc but it’s about the lost opportunity while you’re spending all this money on a house that’s no longer worth the money you paid for it you could potentially be buying a house that’s 25% better for the same money it’s so hard to know what to do I’m not saying I’ve got the answers at all I’m wrangling with this in my mind at the moment too.

The reality is that people just wont sell their houses for the lower price, so the choice is limited during price reductions

I use this website to keep a track of rises and trends, its mainly useful in areas where there are lots of sales so where my parents live for example its a bit sketchy when measuring the last year, but over the last 5 years you can generally get a picture

www.home.co.uk/

Agreed, i used to sell houses in 1994 and there were repossessions but at the bottom end of the market and chaotic families, you saw crayons drawings on the walls wood work, these weren’t people who’d done anything to stay in their homes, often the wife and kids had fled.

Personally id feel a bit sick about benefiting from that scenario, some vulture will

Sorry but I don't see any circumstances now in which they won't fall. It doesn't matter about supply and demand - people simply won't be able to afford mortgages at current prices.

I think people at the higher end of the market will, but it will be people like me who just earn an average or slightly above average wage who are 'ok' but wont be able to borrow

Although it does depend how much people are referring to and whether people start to change habits of going straight into an 'average' property rather than starting in a one bed flat.

Also - they will fall in REAL terms. EG food and bills and consumer goods all go up 10% and houses don’t.

Do you wait 6 months and buy after prices have fallen? But what if the available housing isn’t what you want? What if you can’t get a mortgage at a decent rate then? It’s foolish to buy at the top of the market to put all your investment eggs in one basket and then live in it, but choosing a home that’s right for you isn’t the same.

We will be waiting to see what happens in a few months time. The thought of being stuck in a house we overpaid for at the peak of the market fills me with dread. I don't like being stuck with no options - lived through that once trying to sell a flat post covid.

Reading with interest. I'm about to exchange on a property, nice 4 bed in nice area, less than 10 years old. Got a good mortgage deal at the start of 2022. Who knows what will happen but if I back out now that would be a huge risk in itself. Anything could happen in 5 years which is the mortgage term.