Is this a bad time to buy a house ?

[Salinger26]

We are getting ready to buy our first home but not feel comfortable due to interest rate and property crash rumors. Any suggestion on this ?
I am spending my days in Rightmove and feeling overwhelmed.

@dancemonke I believe that the banks are not "taking a punt" on future interest rates, but that they instead swap away the fixed mortgage interest payments, to instead receive a stream of variable payments that will align with the variable rates they pay on deposits. As a result, the rates they offer are not a speculation on future rate moves, but they are instead a guaranteed return based on whatever the market rate is for those swaps. When fixed rates go up, the counterparties offering the variable payment stream demand a higher future fixed rate for the same variable rate, so the banks raise the fixed rates they demand on mortgages in order to still lock in a future profit.

If you can afford it, buy. We bought in July. We couldn't afford our house now (prices still going up here, combined with higher interest rates).
Nobody actually knows what will happen with houses prices or interest rates and medium-long term I don't see prices coming down at all.

I wouldn't buy in this climate without a deposit of 20% minimum.

Anyone who thinks prices won't drop us deluded. They might not crash, they might not plummet, but drop they certainly will. Lack of supply alone will not sustain the housing market as it currently is.

Government will do anything they can to prop up prices. Too much at stake to let the market crash.
Any drop at all will be temporary. With rents also sky rocketing, people will continue to max themselves out to buy. Lower end of the market in particular I really wouldn't expect to fall

Well they won't, they already aren't. In any case there's a limit to how much they can do. Are people really so naive as to believe the market will never crash again?

Very very best case scenario, prices will stall.

They will drop in the short term. There has never EVER been a long term crash so it's not about to happen during an immense housing shortage

If you have a decent deposit and can handle increases to the interest rate (or fix for a few years) then yes. Property values do fluctuate but it's very dependent on region - those one third loses mentioned up thread were certainly not across the board. My flat never lost any value - bought in 88, sold in 91 for record in the street (just over £100k), and most recent sale was over £750k.
You might wait til the New Year though, see what the fallout has been from the budget, though you risk another interest rate hike.

Yes if you can and if you’ll be okay with interest rates potentially going up

If you can take advantage of the stamp duty tax cuts I'd go ahead and buy.

Many landlords are increasing rents to cover the higher costs of their buy-to-let mortgages.

This.

I wouldn't buy as we are on the brink of global recession. There will be bargains to be had in the next few years.

Rather pay a higher rent at the moment than lock all my money into a highly precarious asset and then potentially be stuck in negative equity.

Things are worse than they were in the 90s.

Agree

Earlier this spring was the peak of the market. Lots of ‘reduced’ prices now.

the flat was in London? I am actually thinking of upsizing to a bigger flat but its probably a good idea to wait a year or two? Isn't upsizing easier in a falling market?

Rents are already extortionate. If things do go to shit renting is going to be harder than owning...

No one knows, honestly. You'll be second guessing forever - it's more about if you can afford it, allowing for big interest rises?

We bought in July 07 which was the height of the market before the last big crash - it wasn't the end of the world, things even out over the years.

What's happening now has been on the horizon for years because the UK, both it's government and citizens, have an addiction to borrowing. I honestly believe you're best staying where you are for the time being if you can, it will be at least a couple of years before the market settles.

Our mortgage would be extortionate, we are paying less on rent than we would on a mortgage. Rent 1800pcm. Mortgage would have been 2000pcm minimum plus interest rates. If we end up paying that in rent so be it, at least we will have some flexibility and be able to move to a cheaper area if push came to shove. I've been stuck before in a house I can't sell - not doing that again.

We were just about to start looking to buy but we won't now.

I also don't get the thing about oh well you might as well buy in a falling market if you're going to stay there a long time. You might INTEND to. But you might not be able to. You might get divorced and have to sell. You might have major problems with the house itself and hate the area. You might get ill and no longer be able to work full time to pay the mortgage.

Not always avoidable but no way would I actively lock myself into a house purchase if I knew there was a good chance prices would drop and I'd be stuck. Not to mention difficulties remortgaging if LTV changes.

I think it depends where you are in the country. In my city, there's a housing shortage anyway, and we're close enough to London for optimistic commuters so they have been moving here (to buy) in their droves since remote working became more the thing, because they only have to be in London one or two days a week.

Property prices might take a slight hit but there is enormous demand for 2 - 4 bedroom houses under £800k and I cannot imagine that changing in the long term, even if there is a temporary dip.

If I was buying a house here, I'd get professional advice, but probably press ahead.

Good luck renting if interest rates go through the roof and all the landlords have to sell/are repossessed

Already dealt with that up thread. Our rent, even if it increases, is no more than our mortgage would have been and, even if it increases, I'd STILL rather be renting that trapped in negative equity. At least I'll have the freedom to move somewhere cheaper at short notice.

That plus our landlords have a tiny mortgage and own their other house outright.

we offered in spring and completed in the summer so really at/ near the peak of the market. At the time things were starting to look bad (we’d noticed an increase in food and fuel around March and energy prices were going to rise but not by as much as we know now etc) and we didn’t think it would be as bad as they are now. Given how quickly things are changing I’d wished we waited. Between increase living costs and paying out for house repairs, we don’t know exactly how much we have left at the end of each month. The budget we made in March is next to useless now.

Part of the attitude here is that the British have a very odd attitude towards renting and think it's vastly inferior to owning, even though there are actually loads of advantages. I've owned before, and I honestly find it less stressful renting. We will own again at some point, but I don't want it enough to buy in this market.