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Original poster

Buy Now or Wait for a crash???

164 replies

DeathByWorry · 29/01/2023 08:32

We're in rented in a place we like. The rented house is pretty crap and we want to get our own place. DH is all for buying now, even if the place isn't perfect and has loads of compromises. I'm not sure. Won't prices crash and we will end up overpaying for a house?? In the news it's all about 20% off house prices, interest rates going up on Thursday etc etc

Is is better to wait for 6 months even if it is in a crappy rental??

OP posts:
MaoamAddict · 29/01/2023 08:34

The government won't allow house prices to drop 20%, as half of the country would be in negative equity. There's a very slight drop in prices of 3-5% in some areas but typically the market stabilises by a period of static prices, rather than an actual fall.

mumyes · 29/01/2023 08:35

House prices in the uk will h NY ever crash. It'd v simple - demand will always outstrip supply - lots of people want to buy few houseS.

User76765 · 29/01/2023 08:37

MaoamAddict · 29/01/2023 08:34

The government won't allow house prices to drop 20%, as half of the country would be in negative equity. There's a very slight drop in prices of 3-5% in some areas but typically the market stabilises by a period of static prices, rather than an actual fall.

That a ridiculously naive statement. I’m guessing you’re either young and don’t remember the last few price crashes or else you have money tied up in property and you’re trying to talk up the market.

negative equity is only an issue if you’re forced to sell. Otherwise you sit and wait it out.

PuttingDownRoots · 29/01/2023 08:37

They were saying they would crash when we bought ours two years ago.

Its gone up in value by about 10% since then.

Fairest · 29/01/2023 08:38

We wondered the same twenty years ago. The crashes never seem to emerge…

otoh don’t compromise toooo much

mumyes · 29/01/2023 08:38

MaoamAddict · 29/01/2023 08:34

The government won't allow house prices to drop 20%, as half of the country would be in negative equity. There's a very slight drop in prices of 3-5% in some areas but typically the market stabilises by a period of static prices, rather than an actual fall.

I agree.
Plus, market demand (loads of people are sitting on cash) will not allow it

Kissedbyfire1 · 29/01/2023 08:39

It’s not the absolute price of houses that will crash, more that the rate of house price growth will slow right down. There isn’t sufficient supply in the market for a true crash. Buy what you can afford at the time that suits you.

User76765 · 29/01/2023 08:39

Market demand is certainly going to help ensure a crash doesn’t happen.

the government intervening to stop people losing equity absolutely won’t happen

Petronus · 29/01/2023 08:43

I think a drop in house prices of 10% or so would only bring prices back to early 2021 levels so hardly a crash but completely plausible that this could happen and a bit more. Might be worth seeing if the BoE raised interest rates to 4% as this would again affect affordability and put some downward pressure on the market.

Spendonsend · 29/01/2023 08:45

Well I would check how well you could afford a house at higher interest rates, and look at houses you could live in a longish time to ride out any dip. You dont want to be trapped in a one bed flat with 3 children for 7 years because of negative equity. So think long term. How long coukd you stay stuck if thats what happens. Also Every house, even when you spend 2 million has compromises.

Lcb123 · 29/01/2023 08:46

I wouldn’t compromise too much - if there’s a downturn in prices, it doesn’t matter so much if you are happy in the house (and it works for you) over a longer period of time and therefore see out the downturn. We’re looking to buy at the moment - can’t wait forever. We are buying in a very popular south east town that will never drop much!

Mumdiva99 · 29/01/2023 08:49

I've already noticed prices dropping here. Houses that were on for 750 now only 700.....similar size houses that were up 4/5 months ago back on the market....so assuming sales have fallen through.

Personally I would wait a few months. But, if your dream house comes up, snap it up.

YearOfTheLepus · 29/01/2023 08:50

It's not house prices, but mortgage rates that I am looking at. We are looking to move in a year, so I'm keeping more of an eye on affordability calculators and monthly repayments. But our next move is our last, so my perspective is different.

Overthebow · 29/01/2023 08:52

House prices seem to be dropping a bit at the moment but they certainly aren’t crashing. People have been predicting a crash since last summer and it hasn’t happened yet. Just buy when you’re ready OP.

Labraradabrador · 29/01/2023 08:52

You will be in that crappy rental for another 6 months regardless - it takes FOREVER to buy a house in this country.

House prices might dip by 20% (personally think unlikely , but no one can say for sure), but for most people that will be hypothetical. In a down market owners are less likely to sell - most can sit tight and wait it out - so availability will be limited. Conditions that force peop,e to sell (like high interest rates or a major economic crash) are also likely to make it harder / more expensive to you to buy.

Personally I think it is a fools errand to try and time the market. I would think twice about buying now if you expect to sell in 5 years, but if this will be a longer term proposition then a million things can happen between purchase and sale.

Snarf23 · 29/01/2023 08:54

Houses round my way would sell so fast it drove prices up in a silly way really which increased through the pandemic and afterwards. Over the last around 6 months. Very few sell in days where as before it seemed like everything did even ones that were big projects. Prices have come down/reduced and those houses still aren’t selling that have been up for weeks/months.

It could be the time of year, the mortgage interest rates, cost of living. It’s expensive to move. But people need to live so I think the market will pick up. I don’t see a complete crash to be honest.

Original poster
DeathByWorry · 29/01/2023 09:02

Why 5 years? Idk what will happen in life, but we kind of plan to live in our next house for a while, maybe then rent it out so we can travel. We'll need to sell it at some point and that's the worry - if we buy now, are we paying too much in a market that's coming down?

OP posts:
C4tastrophe · 29/01/2023 09:02

Be very careful. There are a lot of run down properties and also well kept but very dated properties out there with asking prices not dissimilar to modernised/newish properties.
So research the market and prices very carefully ( how much is a rewire/kitchen/bathroom/heating etc ). Also older properties that are energy money pits.
Will the market crash? In major cities/towns where people want/need to be, more a correction.
In dross towns with little employment and poor transport where no-one would choose to live, much more likely.
Personally I’d research the market for 6 months.

Original poster
DeathByWorry · 29/01/2023 09:04

We're seeing prices come down here for sure. Houses coming back on the market, prices coming down. Every day there's a reduction email on a 3 bed house.

OP posts:
bloodymary100 · 29/01/2023 09:06

If house prices crash it's almost certainly in tandem with another hike in interest rates so the only people who really benefit from a crash are cash buyers and the banks.

A £200,000 mortgage at 5% is more affordable than a £170,000 at 7%.

AsACloud · 29/01/2023 09:09

MaoamAddict · 29/01/2023 08:34

The government won't allow house prices to drop 20%, as half of the country would be in negative equity. There's a very slight drop in prices of 3-5% in some areas but typically the market stabilises by a period of static prices, rather than an actual fall.

Unfortunately you only have to look to your neighbour to see this does happen. Houses in the Republic of Ireland dropped up to 65% (Dublin where they were by far the most expensive and 60% rest of country) by 2012 after hitting a peak in 2007. Massive negative equity suffered by many and for years.

LimeCheesecake · 29/01/2023 09:12

The last big crash was fuelled in part by repossessed properties all being dumped on the market by banks/lenders who just needed to recoup the amount left outstanding from what they had loaned, not needing to hold out for a decent profit. Laws have changed since then and it’s very difficult to get you out of a house you’ve bought - repossessions are expensive for banks now, it’s better for them to find ways to help you stay in the house and pay back the mortgage over a longer period.

LimeCheesecake · 29/01/2023 09:16

Oh but it’s also worth having a chat with local estate agents, quick a few people will hold out putting their house on the market at this time of year, waiting for spring, but might start conversations now with estate agents about what theirs is worth etc. if the agents know you are looking to move in this particular area, what your budget is and that you are chain free, they may be able to show you properties earlier than if you wait for them to hit rightmove.

Legotiger · 29/01/2023 09:17

Prices always increase ultimately. If you don’t think you’ll need to move imminently, buy.

piggypoole · 29/01/2023 09:18

I don't think house prices will
Crash overnight. It will be just be stagnation .