Buy Now or Wait for a crash???

[DeathByWorry]

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??

I agree with the PP that said even if you found something to offer on today you'll be in your rental for 6 months anyway. Buying & selling takes forever.

I also agree (voice of bitter experience here) not to get sucked in by a doer-upper. The cost of building works is so high now that I don't think it makes sense unless you & your partner are already tradespeople/builders and can DIY.

I dont think 5 years in an exact science. Last crash my house had the same value for 7 years. My colleague bought just before the early 90s crash and then it took 8 years to get back to the value she paid for it.

I lived in the Netherlands for 5 years after the 2008 crisis. Real estate prices nationally DID come down 20 percent over that exact period. There wasn't one big crash, possibly because banks wouldn't let people walk away with negative equity. Instead, lots of for sale signs everywhere for years and a slow deflating of the market. You're right to tread carefully as long as interest rates look to stay high imo.

In my area, house prices are dropping to about Spring 2022 levels, before asking prices started going over the top in the Summer.

I don't see there being a crash here as the market is still moving, but there has been a minor correction to remove the overinflation of asking prices/unrealistic sellers. I would have thought a crash normally comes with high unemployment, which isn't really the case at the moment.

It's difficult to predict going forward as it isn't really the right time of year as most houses start coming to the market around March.

waiting for a crash doesn't work. when there is a crash, in reality there's nothing available to buy, because no one wants to sell until prices start to rise again, only a very few properties get sold where there's some reason a sale can't possibly wait so the number of data points of actual sales contributing to the minimum point on the graph us actually very low

are you definitely staying put in the area you would buy in? if you aren't going to move again for at least 5 years then it really doesn't matter that much if prices fall a bit. when you have to move then you will still be selling one house and buying one house and it doesn't make a massive difference whether you sell the first house for £330k and buy the second house for £360k, or whether you sell the first house for £300k and buy the second house for £325k - the difference between those scenarios in terms of higher or lower monthly mortgage payments isn't very large. any if you don't need to move again then it matters even less, the value of your house is irrelevant if you aren't trying to sell it, you just keep paying off the mortgage and ignore

@DeathByWorry

in your situation I'd do what a PP said, talk to all the local EA about what you're looking for, I'd down play how much you're willing to spend. See what they come up with.

I'd buy as soon as I found something I liked because rent is dead money.

I've always enjoyed buying places where a lot needs replacing because I like doing them up in my taste. But it's getting more & more difficult to find available trades & when you do it's more expensive & less efficient so takes ages to get projects completed (well, in the SE anyway)

house prices are going down here & not much is selling. I think it'll be like that until spring then everyone wanting to sell will list & things will change.

I'd put good money on No crash.

Negative Equity is a bastard, but if you buy wisely & are prepared stay in the house (no magical time, just ride it out) then it will 'come right'.

if your local schools (including senior school) are currently good, I'd buy now.

yes, they might come down a bit, but currently you're paying rent, not your own mortgage.

I would buy somewhere that has an avocado bathroom & a sunflower yellow kitchen, but I wouldn't buy somewhere that has had them ripped out, with the difficulty of getting trades in (& the cost) unless you & DH are able to replace them yourselves.

I'd be very surprised if house prices drop more than 4-5 percent as demand is still high. In UK many people want to buy their own house.

The government has never prevented negative equity in the past

If you can buy in the slump you will spend less and not everyone is in negative equity y even in the slump , some people just have to move and sone people will be forced to sell up so there are always homes to buy

You shouldn't aim to find the low point of the slump ( that is madness ) but I would be minded to wait a little unless something really good appeared - as others have said you have less to worry if it's a long term home in that case

Nobody really knows but I think it’s more likely that prices will stagnate or drop slightly rather than crash.

If you look around, you will probably find more people who are glad they bought when they did than those who are pleased they waited.

Half of the country would not be in negative equity!! You've made the mistake of assuming that everyone is mortgaged to the hilt.

A large proportion of people are in houses that they have fully paid off, and of the rest, most bought before the crazy price rises of the last 2-3 years.

And of those who bought in the last 2-3 years, a reasonable proportion would have brought more than 20% equity to the purchase.

Some would be in negative equity, but not a majority by any means.

It's not just demand

It's demand and affordability

Many more people want to buy than can afford to

Another interest rate rise next week is likely meaning even fewer people can afford to buy at current prices and when the pool gets too small the prices drop

Loved round this loop a few times now

The rental market is littered with people who waited for a crash and then got priced out for ever more.

don’t gamble what you can’t afford to loose. And waiting is a gamble

House prices won’t crash. In the last 4 months our has gone up in price!! Apparently it’s a sellers market at the moment with lots of buyers but not a lot of properties coming on, so they are selling at asking price or above very easily

No it’s the opposite.

what happens is if a market starts declining then people sit tight, they don’t go on the market . As supply gets scarce,prices start to increase. As some people still need to move and there are more competing for the same few properties

I second this! We bought a renovation project pre-covid and did about half the work before covid kicked off.

We're now completing the rest of the work and lots of prices have pretty much doubled. It's insane. Availability of trades is also an issue

I am still looking to buy now but would expect to offer 5% or even 10% if a lot of work is needed below asking price because many houses are being reduced where I am or come on the market at more reasonable prices than last year.

To give you an example:

• I saw a house advertised at £280,000 in Late November. I offered £265,000. Seller accepted the offer initially then at the last minute took a higher offer in December. I refuse to get into a bidding war as I didn't think the house was worth more
• Then two identical houses on the same estate (one the other semi attached to the house I had offered on) came on the market in January listed at £260,000 and agents said sellers would accept £250,000. so whoever bought the first house overpaid by at least £20k and their house has already gone down in value before they have even moved in. It needed at least a new bathroom, flooring and painting & as it was built in the late 90s and is just a boxy new built type of construction there is only so much you can do to add value.

I would have made a really big mistake if I had tried to up my offer in December.

My point is there are many reductions at the moment in my area but also some sellers who are still expecting silly prices. There is a trend of buy to let landlords giving up on the rental market and off loading their property portfolio so there is a steady supply starting to appear for sale.

So I am happy to look for a place to buy now but I certainly won't be offering the asking price especially as mortgage rates are going up again this week and I am planning to stick to my budget. Of course sellers can refuse my offers but at the end of the day it is a business transaction and we all need to look after our own interests.

Start looking put in cheeky offers, worse case if it does crash that much you can always pull out or ask for a reduction during the many months it takes for a sale to go through

Are you basing this on Zoopla?

Zoopla uses land registry data that is several months old by the time it is available to them. So zoopla won't be fully reflecting the performance over the autumn (which is when things started to bite), and should be taken with a bucketload of salt.

A house builder near us is currently only selling a third of the number they want/ need per month. When last year they were selling the desired number every month without fail. These are nice 3 and 4 beds in middle of the country.

They've just announced a large redundancy.

@Greenfairydust is someone who knows what they are talking about.

@LookingOldTheseDays no not off zoopla. I had my property valued 4-5 months ago and contacted the agent last week to put it on the market and she said will put it up for 5-10k more as that’s now what it’s worth and I have no doubt you will definitely get atleast the extra 5k !! I was shocked. She said as there are not many properties at the mo and some people are desperate to move.

People have been waiting for house prices to crash for a very long time! It's not going to happen

People saying there will never be a crash, your reasoning would have applied to Japan too but they did have a crash.

When people say crash they think it will crash to the point a single Joe bloggs can just buy a house….never going to happen. Look at 2008, it crashed then, prices were still high and they tightened giving out mortgages so a standard Joe who was single still couldn’t afford to buy a house.

Wages are paid too low in this country really.

10% reduction is likely I think depending on the area & property. I just think it will be yrs of stagnation, I can't see interest rates going back to the recent lows.