Should I buy a house now?

[Whattodo1233]

just looking some advice. My partner and I are first time buyers. We have an offer of 130k accepted on a house, 10k above asking due to bids. (Needs some renovation and renovated properties on the street have been up for 140-160k recently) With current mortgage rates we would be paying 6% interest on a 95% LTV.

We currently rent privately and a move would mean we would be in an area we want to be, close to family as opposed to where we are now being further away. We would also have some childcare support.

my issue is due to interest rate, mortgage would be higher than current rent by approx £250 a month however aware this could go up at anytime.

mortgage offer is for 5 year fixed. Is this is a silly move in current climate?

Yes.

Yep I would go for it if I was you

I’d totally do it

you could get thrown out of your rental anytime and the rent could go up way more than 250

Any increase in mortgage rates on my rental property is going to be absorbed by the tenants not me, at least if you’re paying down your mortgage your £250 is going somewhere and I would imagine that your rent is going to increase if not by the whole £250 certainly by some of it.

The childcare support alone will be worth it’s weight in gold to me we brought up kids with non-and it was certainly an enormous part of the reason why we broke up.

If you have a 5 year fixed mortgage in principle that you know you can pay then yes 100% you should buy it. 5 years is a long time, when your mortgage deal runs out then you could be looking at it going down. 6% seems pretty good atm!

It’s always better to get a foot on the property ladder. Rental can increase or landlord could decide to sell the property. This will be your own home. If you’ve got a 5 year fix then at least you know what your mortgage payments are going to be. Good luck

I think in 5 years time your house will have increased in value and you’ve will have a higher LTV for your next mirage deal.

I meant “yes”, as in, “yes, that would be a silly move”. But you’ll always get responses telling you that you can never lose on buying property. Except when you do, of course!

If you can afford the extra £250 a month and you aren't about to eg reduce your hours or become a SAHM then I would buy the house. It gives you five years of stability in an area that suits you and your family better, and at the end of that time rents will be higher and in the unlikely event that house prices are lower, mortgages will be more difficult to obtain.

I would buy.

Yes rates are high but if you can afford your fixed rate then you'll be fine. In five years you'll have built some equity and maybe prices will have risen.

Thanks all! It is affordable for us, just rubbish to know so much of the monthly payment is going to interest but I suppose that’s life especially with a high LTV.

@Iamthewombat out of interest what would you do instead?

Hmm. The only positive thing is the childcare support and the area.
The negatives are that you are paying over asking on a house which is bound to fall in value, although by an unknown percentage at present and that your monthly payments are significantly higher than your rent.
I think you need to weigh up your options very carefully.

Scaremongering rubbish.

Absolutely go for the house, it sounds like a great move.

Which bit is 'scaremongering' exactly@Tippexy?

The bit that the house will fall in value? I don't know if you read the news at all but forecasts of falling house prices and recession are all over the MSM. It's certainly obvious in my area and I've read lots of similar posts from others on here.
I guess you don't want to believe that but it doesn't make my post 'scaremongering'.

If you do buy now bargain hard on the price, it's a buyers market so take full advantage of it.

I'd do it, especially if it is a long term solution and it sounds like it ticks a lot of boxes. for your needs. if you're planning on living there 10 years+ you should be fine; I was looking at figures for house prices in last 20 years and even in the 2008 crash, prices only fell to a base of what they had been two years previously and quite quickly regained that. Mortgage is perhaps more of an issue, but as people have said, rents will likely rise as well anyway.

Not in all locations and not at all price points, anything under 200,000 around here is being snapped up within a matter of days and usually for 10% over the asking.

Oh these posters never have any solutions as to where you’re supposed to live in the meantime as an alternative to throwing your money down the drain on rent every month.

if you were 22 and living in your parents spare bedroom on 40 grand a year I’d say wait too but that’s not the scenario that you suggested.

@HiveBee that's bizarre, mortgage rates have tripled and people are still paying over the asking, that makes no sense.

Because of your ridiculous broad brush assertion that all ALL house prices are going to tumble. Of course they won’t. Even in the 2008 recession, decent houses in decent areas maintained their value. From the fact that there has been a bidding war for the OP’s house, it’s safe to assert it’s a similar situation. The move makes practical and financial sense for her situation.

Isn’t the advice usually to buy if you can afford to and it’s to live in rather than an investment?

I’m no expert but I’d buy now OP, unless you think you can get a 10% deposit together in the next 2 years or so? In which case might be worth waiting as I doubt house prices are going up much any time soon and a lower LTV is safer if prices drop.

It’s a gamble of course, but I don’t think you’d be silly to buy.

Do you always enjoy hyperbole quite so much?

I said 'fall', you said 'ALL house prices are going to tumble'

No, it's no safe to assert anything. You can't always look to the past to predict the future. This situation is different to 2008.

If you took the trouble to actually read my post you would see that I mentioned that the childcare and new area were positives and that she should weigh up her options carefully. It may well make some practical sense but it's absolutely not a given that it makes financial sense.

Calm down and try to accept that not everyone has the same opinions as you.

@HiveBee absolutely if I was 22 living at home I wouldn’t be considering this at all. But it’s a choice between private rent or purchase. Current rentals in the area we would like are between £50-£150 a month more expensive than the mortgage would be. Obviously not factoring in that we would also be paying rates/insurances on top of mortgage.

But security for my child not to move between rentals is looking like it’s worth the extra money.

@Luckydip1 unfortunately everything in our area is still going to bidding wars. Thinks it’s more of a supply issue as houses in this price range are still being fought between first time buyers and buy to let’s.

What is this area that defies the trends where everything at the lower end of the market is apparently being snapped up often at 10% over asking? Are you an estate agent or in the housing market business that you have the information?

A different poster from Sheffield mentioned that things were still moving quickly in her area a couple of months ago. Looking at Sheffield on RM now, that doesn't seem to be the case now. Nearly everything marketed in the last 14 days still unsold and some of those sold were actually reductions.