So confused. Buy now or wait to avoid overpriced house

[splashypuddles]

Keep reading this and that and this and that and don't know what to think.
Don't want to end up on high interest rates but don't want to end up on negative equity either.

Essentially nobody knows.

There's loads of this and that being reported on the news and in the papers, because stories about house prices make great copy, whether they're going up or crashing down.

'Predictions' about what might happen swing between rough guess to complete stab in the dark, depending on your point of view.

Generally speaking, long term the market always comes back, and a property purchase should be treated as a very long term decision.

Well, I just checked one of the areas I am interested in on Rightmove and I can see the same properties that I checked out about two months ago: none of them have sold and many have being reduced this month so I would wait a few more weeks if you can. Seems that there are definitely some reductions happening in some areas.

I just saw one, SSTC months ago, back on yesterday. Very sought after area, only 6 houses usually for sale.

is it bad to be planning to upsize in 1/2 years? Would it be a better time to buy now.

I think it depends, it may get harder still to get the actual mortgage rates. Generally though, as others have said, property will eventually continue to go up in the longer term. Also, if you need somewhere to live and find somewhere just right then that is probably more important, as long as you choose a mortgage that you can afford monthly.

I’d say look for something low-maintenance and affordable where you wouldn’t mind living for 10 years.

Oh - and buy it asap, but if you need to wait to find it, I’d wait a little while, till you find a good choice, don’t panic-buy a money pit.

We were ready to buy but won't now. I don't want all my money tied up in an asset that I may not be able to get rid of. I want it in the bank where I can access it.

A mortgage would have been more expensive than renting for us as it was.

Lenders already seem to be pricing in the medium term interest rate predictions, so it’s not like you’re going to get a cheap rate now. I’d wait for prices to fall.

Do a comparison of a house at 100% of current asking price at today's interest rates and then at 90% of current asking price at 7.5% - which is better if you fix for e.g. 10 years?

If you have a small deposit you do need to be midful of negative equity.

It is impossible to predict price directions more than a few years ahead because who knows what is going to happen.

If you find a mortgage with a payment you can afford and a property that you can live with for a longer term those are the decisions to make.

We bought at the height of the market in 2007. Market crashed in 2008. We were left in negative equity but because the home was a long term home rode it out.

Still in that home now, no longer in negative equity.

@RomeoOscarXrayIndigoEcho I think that's the best thing to do actually. I'm quite worried the banks will reduce the affordability down to an amount which means we will end up in a shed or something for a lot of £££. Thinking maybe just buy get on with it and ride out the unstable economy.

We were advised by our financial advisor not to try and predict the future but to do what meets our current needs. For us, that meant buying now, while we're both earning reasonably well and could get a mortgage (knowing that our salaries will reduce slightly in 5 years or so), when we had a decent deposit saved and at a point when we really needed a bigger house to accommodate our family. Nobody knows what the future holds.

Hmm that's good advice. We will probably both earn more in the next 5 years but I suppose are worried the multiple of salary lending will go down and counter any payrises.

Are you a ftb? It's difficult, we bought as ftb's in 2019 when everyone was saying hold off. We are buying again now, hoping to exchange shortly.

For us we bought where we could add some value. We've made some money and built quite a bit of equity up over the last three years. It was a calculation of how much equity each mortgage payment would be, vs how much interest would be deducted each month. Even with higher interest rates, we will be paying down a good amount of the loan amount each month, and living in something we like, so we've decided to go ahead again. Renting is so expensive in our area currently also.

What do your numbers look like?

"Long term the market always comes back"? Not this time, the bubble that is now bursting was a once in history cheap debt to the masses experiment that led to the biggest property bubble ever known, the geopolitical/globalisation map has changed forever and cheap goods/cheap debt wont be back as we have known them IMO, when this bubble is gone its gone........Bye Bye Bubble!

@DeadHouseBounce, In previous times there wasn't supply issues. I recall houses being empty as couldn't be sold. It's very rare for this to happen now as population has increased such that supply is an issue. Developers build on land that previously wasn't viable such is the demand.

I agree house prices will soften, that's happening now but a crash is unlikely...in my area if a house goes up for sale at a sensible price there are still 20 viewings. The recent inflated prices will be reset due to interest rate rises.

Buy now if you find a place you like, have a good deposit and can afford interest rate rises (or can get a fixed mortgage). Pay back capital as much as you can so that you build equity.

Don't buy if you think you will need to sell in the short term 2-3 years.

Rightmove is reporting that the reduced prices and unsold properties are inline with last year’s trend. So it’s not unusual for this time.

I think people are deluding themselves if they don't think prices aren't going to, at the very least, stall. I'm not saying there will be a huge crash of 30% or whatever. But I think the days of properties going within 24 hours for thousands and thousands over asking price are long gone.

All depends on the area...my agent friend sold 2 houses here for over asking price just yesterday....such a shortage.

Re cash in the bank - be mindful that it can be eaten in pet by inflation…

Eaten in part that should be.

For me the fixed costs and knowing that it was affordable and all circumstances, do not over leverage yourselves, outweighed any disadvantages of over paying timing the market wrong whatever you wanna call it, you win some you lose some over a lifetime of property purchase but also in terms of your pension purchase, in terms of your stock market shares and savings. I am throwing every spare penny I have at the moment and into my pension in order to take advantage of the low market but I’m still gonna buy when the markets higher because you never know where the top is and you never know where the bottom is so the key to it is just consistency. Trying to play it is a fool‘s game.

I think you might be a tiny bit premature with your prediction!

'Predictions' where the property market are concerned swing between guesswork at one end to complete stab in the dark at the other.

Depends on your circumstances. If you are planning to sell and buy something bigger, I would, providing you can afford repayments comfortably, are comfortable with a fair bit of back and forth with valuations etc (which may dip) and have reasonably certain jobs and circumstances for the next five years. If you want to have more kids, work in volatile industries, move again soon-ish or anything like that, I’d not move now.

If you can sell now and move in with parents or even get a good rental, you might get a lot more for your money in a year or two. There’s definitely going to be a dip. But I don’t think a crash. Timing the purchase, based on the best combination of house prices and interest rates may not be not be for faint hearted, though! I think in five years we’ll be back to ‘normal’, although I think interest rates will stabilise at 5/6 percent (which IS normal, historically) and housing won’t boom again like it has recently, but will keep steadily climbing (again like it historically has done) I’m selling now. I plan to buy again in about 18 months. I have a back up plan for if I decide not to buy, though.