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.

"Property will eventually continue to go up in the longer term."

No it wont, the geo-political/globalisation structures that allowed the cheap debt to the masses experiment to take place have changed, they wont be changing back in our lifetime, this is it - the top of the biggest property bubble in history. If you buy now you will be crushed by debt and interest rates.

🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣

Can somebody put the bot back on to charge. I’ve noticed that as the power runs down the comments become less and less coherent

I just sold in London and I am moving to a much cheaper seaside area and still going ahead with buying. I don't want to waste my time renting. I won't be taking on a big mortgage though.

Deadhousebounce is out of control. What they’re trying to achieve is the mystery.

What possibly good news is on the horizon to make people feel confident about taking on a mortgage?

Therefore, it would be unwise to buy at present

Good news ? Did you like wait for a special birthday or something to take on a mortgage or perhaps the Queens Jubilee ?

people buy houses when it suits them and when they can.

You've seen how quickly the economic picture changes OP just this and last week, its all over the shop

So you cant really plan things like this when its your home that you're thinking about. Buy sensibly, try to plan forward for if rates rise and make sure you can afford an increase but I wouldnt wait around for prices to go down, people have spent decades doing that and they're still living in a bed sit somewhere

What's the risk to you of being in negative equity? Are you in a situation where you're likely to need to move again in a short-ish period (e.g. moving for work, increasing family etc?)? Would you be borrowing a high proportion of the property value and worried this could become affordable?

In theory, being in negative equity is only an issue if you want (or need) to sell or remortgage. Realistically, you're not likely to be able to remortgage any time soon if you're a FTB without a very large deposit, so I wouldn't worry about that. If you're likely to need to sell at some point in e.g. the next three years, or worried about e.g. job losses etc, then I think negative equity is a risk.

If you think you could buy somewhere where you'd want to live for ten years, and you can get the mortgage to do it, I'd probably bite the bullet. Prices might be lower by, say February, but will you be able to get a mortgage then?

The over inflation has stopped so prices at a realistic level. What might have gone for £240k at the start of the is now around £220k where I live. There are still more buyers than sellers though

We have made the decision to buy now. We sold in Feb and moved to a cheaper area, and the market has been stagnant here for months. The houses here are not inflated and we have had an offer accepted 8.5% under the original asking price. I could wait, but a potential 15K decrease in price will be eaten up by higher interest rates and high rent very quickly.

Frankly I'd rather have a secure, stable home with a 5 year fix than be in a rental. Our rent is double our mortgage offer on the same house. You really have to look at your local market/LTV/life and make the decision that's right for you.

Why willingly put yourself into negative equity though?

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

When a market built on sub 2% loans hits mortgage rates at 6% and rising it gets easier to see the direction of travel.

We bought now, managed to fix for 5 years at 3.4% in a property that we intend to stay in for 10 years (if not longer). For us, the peace of mind that we can afford the mortgage for 5 years and no one can put it up, was better than the ever increasing fear of our landlord putting up our rent (rent and mortgage the same amount pcm). If we weren't first time buyers, we'd stay put.

I bought my house in 2007 at a 100% mortgage (I know, I know - I was young and stupid!). The market then crashed. I’m pretty sure I was in negative equity for some time but I don’t know, I didn’t look. I had paid for a roof over my head, and I had a roof over my head. Negative equity made no difference to me either way.

Even though I bought when the market was at its peak for an inflated price, my (very small and modest) house is now worth over 50% more than when I bought it. Over the long term property values rise. The only issues come if you can’t ride out any short term wobbles in the market or you need to move sooner than you expect.

Buy what you need and what you can afford, with an eye on how the property could work for you longer term if needed. Don’t spend your time stressing about what the market might or might not do. Every month you carry on renting you’re just throwing more money away - and what happens if mortgages suddenly get much harder to get approved for? If you can afford it, I wouldn’t wait, personally.

Absolutely correct

I hate the view that renting is "throwing money away". DH and I, pre kids , chose to rent in Central London than buying - we could have only afforded at that point to buy in some godforsaken commuter town really far out. Neither of us wanted that. Neither of us regret it. We had a bloody amazing time living in that area for three years - we won't ever get that time back.

I agree with this. Prices come good in the end. There will be people who dithered in 2016 in expectation of a post-Brexit crash, then a COVID one. Interest rates might well be the thing that breaks the camel's back but there's no knowing for sure.

In your shoes I'd pay what you can reasonably afford, and be sure it's a home you can see yourself in for the longer term, or could manage a hit if you need to move on more quickly. I think there might even be deals to be had right now while the mortgage market looks so unstable.

I did the same in Sydney basically you have to view it as a three year holiday because that’s what it was even if it was a working one at that but in terms of long-term prospects it was a waste of money

Neither DH nor I are British and where we are from (different countries) renting is seen as a totally normal way to live, it's not really necessarily a reflection on how well you are doing in life etc. Certainly not a waste of money as you are paying to live somewhere! I do think theres a slight obsession about homeownership in the UK.

Having said that, we are in the same boat, mainly because we want to move out of London. I think we have chosen to be cautious and sit for a bit longer before entering the buying and selling circus. Where we are looking to move to, prices don't seem to have dropped at all.

"Prices come good in the end."

Not at these price levels, this is the end of the cheap money experiment, the prices we have now are not coming back again.

I was the one who made the comment about "throwing money away" - I just wanted to clarify as it was a passing reference and I didn't fully explain.

I don't think there's anything wrong with renting. Everyone needs a roof over their head and renting achieves that. Some people rent for life and never own, and I don't think that's a bad decision. Owning property isn't a choice that everyone wants to make.

However, if you plan on buying, you're already in the right area, you have a deposit and can afford a mortgage, then I think that continuing to rent is a waste of money. Essentially, if there's no good reason not to buy, and it's something you want to do, then the sooner you get onto the property ladder, the sooner your monthly payments will be going towards an investment rather than into a landlord's pocket.

In your circumstances, renting was a deliberate and considered choice because you didn't want to/couldn't afford to get onto the property ladder in the area where you wanted to live. I wouldn't see that as throwing money away as you achieved something that wouldn't have been otherwise possible. If, on the other hand, you just hadn't gotten yourself organised and fully intended on buying in that area, then I would consider rent as throwing money away that could otherwise be used towards an investment ie/mortgage payments.

So, rent is absolutely not always a waste of money, and sometimes it's the best option. But equally, there can be some circumstances where it can be. Very much depends on the individual circumstances, and no offence was intended.

Well we rent in the area we want to live in now, and we have a deposit, but after the shower of shit that has been the past two weeks I feel much safer renting for the present. I don't feel that's throwing money away either. It isn't like buying a house is exactly cheap, what with surveys and solicitors and stamp duty and moving vans, and our mortgage would have been more than our rent is even before this nightmare. At least if our rent goes up significantly we can move easily.

"At least if our rent goes up significantly we can move easily."

Yes, much easier to do than get rid of a large mortgage debt taken out at bubble prices, much easier and far less stress.

We’re stuck waiting to complete, we were viewing other properties as an alternative but we’ve stopped. Prices have risen around here since we offered 6 months ago and we don’t feel like paying more for less.

The issue in our chain may not be resolved before our mortgage offer expires but the market here is clearly slowing (lots of reductions, houses staying up for ages) so we may find the increased mortgage repayments are somewhat offset by a revised lower offer in line with the market.

We’re renting so keen to move but we want a family home we can stay in for a long time. We chose a fixer upper because it was the only way we could get the space we wanted, if prices fall even 10% we can get the space AND a property in good condition so the alternative is we take our renovation budget and use it for a larger deposit on a different house, reducing our LTV to hopefully get a slightly better interest rate.