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??

Maybe it's dependant on where you live. Where I am (West Midlands) prices have dropped in my town (popular,commuter) by 10% since autumn. The others, which have not been reduced, have been sitting on Rightmove for months. The newish build ones are the few that are selling. I think in my area there's going to be a point where people can't hang on any longer and they'll have to reduce the price. I think there's some banking on prices not going down and holding on but I predict house prices reducing a lot more this year. We're planning on buying our first home later this year and I watch the market closely trying to decide when to buy!

higher interest rates are better for the economy & I say it's contributed to wage stagnation.

Then also factor in the cost of maintaining the house which, depending on the age of the property, can be very high!

I survived the 80’s property crash - just! 2008 didn’t really notice, and any other along the way. Needed somewhere to live and that was by paying a mortgage or rent, glad we opted for a mortgage as it’s now paid off. If you are hoping to make a quick buck which sounds like you are as 5 years isn’t long then I would be wary. If you want to own you need to buy at some point and be happy with what you’ve bought long term and be able to afford the bills, there will always be talk about crash’s and booms, but you won’t benefit from either if you don’t own. For my DC we will help where we can for them to own with a mortgage as I worry in general about people who rent going into retirement having to still factor in rent. Therefore think about the long term.

The longer you delay in buying somewhere, the less time you give yourself to be mortgage free when older

I swear there are still people waiting from 20 odd years ago for the massive crash, chuntering on about the next crash and holding on until then..... they could have paid their mortgage off by then

Negative equity is only an issue if you think that you will need to sell and buy something later, barrring disasters of course which could happen to anyone

Buy sensibly and affordably

Negative equity is only an issue if you think that you will need to sell and buy something later,

that's not true though. Negative equity can be an issue if you need to remortgage.

Not to mention when is paying 10-20% more for something a good idea?
Borrowing 100k costs 175k over 25 years.

‘House price crash’ is media hype which never actually happens. Prices may drop by a few %, or they may stabilise for a period, but the history of the last 30 years has shown at they do not ‘crash’, for 2 main reasons :

1, Government policy is to do whatever it takes in terms of fiscal & monetary policy to prevent house prices ‘crashing’, which would cause mass negative equity and economic depression.

2, The U.K population is still growing very fast, and house building is nowhere near keeping up with population growth so demand for housing will continue to exceed supply for the foreseeable future. Net immigration was +500k people last year. That’s a city the size of Sheffield.

Not to mention when is paying 10-20% more for something a good idea?

More than when? House prices aren't static. The house might be 20% cheaper in 12 months, but then in 3 years it could be 10% more. How long do you hold out for? People have been hesitating since 2016. If I'd have bought my style house (new build) 4 years ago I'd have paid about £65000 less, but if I tried to buy it now it would be about £50000 more. Maybe next year it'll be less than what I paid. It's all moot, I needed a house when I bought the house, I can afford what I paid, I'm sure I'm in for 25 years of peaks and troughs, but ultimately, it's very likely to be worth more in the long run. The biggest risk if you don't need to move is if you have to go on the standard variable, which is why everyone is advising stress testing.

I love threads like this because it gives me to change to use my copy and paste answer. So here it is

In the long term, property always increases in value.
In the short term, it might increase, or it might decrease.

Hope that helps.

35 years of buying and selling, really can’t see a “crash” any time soon. Demand is still outstripping supply by a considerable way.

@Chowtime
I will counter with this one then

Past performance is no guarantee of future returns

Well my caveat was barring any disasters

You get a mortgage which avoids the need to remortgage if possible

You cant predict everything but the balance is, do you want to keep paying for someone elses mortgate/asset while living in a crappy rental as OP describes it, with all the instability and restrictions that this brings or do you buy your own property, take responsiblity and weather the storms that might come in the form of a paper loss if house prices go down/up that year/month

There will never be the crash that people are imagining. Even if the value of property goes down temporarily it will always increase in value in the long term. Buying a house to live in is usually a very good long term investment. For every year you are renting that is (tens of) thousands of pounds you could have put towards your own property.

Just have a look at the house price crash forum, they have been doom mongers for decades. Some of them sold their London properties thinking there would be a massive crash in 2000, 2008 etc etc and effectively lost a fortune. It astounds me that some of them are still clinging on to the notion that they made the right decision.

I bought my first house in 1990, it was a small terrace in London. I tried to sell in 1998 or thereabouts and couldn't even give it away, I think I reduced it to £58k and eventually just rented it out as I had to move abroad for work. It's now worth £650k and the area is considered desirable, despite being considered a shithole area back then.

Remember when you rent, that money could be used towards buying somewhere. Be sensible, don't over borrow and factor in a price drop to your offer price

New zealand, Canada, Australia, America, all have house prices that have dropped hugely through 2022, many areas by over 20%.

What has convinced you all that the UK will be immune to the same

No one can tell for sure when is the perfect time to buy and it depends on the area and type of house. As others have said, it would be sensible to buy something that works for you long-ish term.

What has convinced you all that the UK will be immune to the same

It's not about immunity but not sure it's really possible to compare economies like that, Japan's housing situation is pretty unique but not a sign for the rest of us to be concerned as it's very different to us. UK has its own quirks with the size of our population and housing stock.

Population density and rate of immigration.

This is the most solid advice on this thread.

Never mind a crash. House prices always bounce back, and people can wait it out. But what happens when rates are hiked up (such as now). If you'd already stretched yourself to buy that 'dream house', where do you pull the money from when suddenly your mortgage has gone up by X amount every month.

Forget playing the market. Lots of that is dumb luck. Consider what you can afford each month. The market will do what it does.

I think prices have already gone down. As the market is slow you might be able to get a better deal on price if buyers are desperate to sell. I think it's a good time to look.

House prices are dropping where I am and the market has slowed considerably. I think it depends where you are OP

Houses are very expensive in this country, they will eventually need to lower prices to sell. It is mental how much house prices have increased within living memory. It isn't sustainable for houses to be this expensive. Dont forget we have an aging population too, there will soon be more supply than demand.

The population of the UK is increasing by half a million people per year; how will we have more supply than demand?

I'm not convinced there is going to be a crash. Sure a drop but not a full blown crash as some sections of the media like to put fear into people. It's a buyer's market at the moment though so don't be afraid to make a cheeky offer below the asking price.