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??

Also houses are not expensive all over the country. These discussions are invariably south and London centric, forgetting there are whole swathes of the country where you can buy a decent property for 3x a double minimum wage.

The big crash won't happen until 2024.

Birth rates are declining, they have been declining for awhile, a pretty steady downwards slope. There will be less people needing housing, unless you're relying on immigrants to buy houses at ridiculous prices.

helpful post of the year …

i know I missed it, I lived it. I tried to get a mortgage when the lenders stopped lending.
the government then threw money at the market, propped up the market. Unfortunately my landlord sold, in that window. So my savings went in the cost of the house move and rent deposit. then house prices roared

Sorry @Housesare must have quoted the wrong post!! Sorry 😊

Make no mistake house prices are heading downwards.

The fact that it will now cost more to have a mortgage means many people can't borrow as much, so prices will have to come down.

There is always a lag in data to do with house prices and the picture is more dire than people think.

Sellers will have to get realistic, when the spring bounce back doesn't materialise, I think it will dawn on them.

helpful post of the year …

i know I missed it, I lived it. I tried to get a mortgage when the lenders stopped lending.

the government then threw money at the market, propped up the market. Unfortunately my landlord sold, in that window. So my savings went in the cost of the house move and rent deposit. then house prices roared.

there are many landlords waiting to buy in round me, not people with one or two properties. But those with 5+.

We are heading into a recession, a big one. Inflation is over 10%. Interest rates are climbing. The government doesn’t have any money, and the markets have spoken about tax breaks, borrowing etc. There are more people receiving benefits than paying tax. The full employment figures includes part time workers receiving benefits and tax credits. There’s a war on in Europe, and in less than 2 years Labour will be in charge and can (rightly) blame the situation on Tories when they increase taxes even more.
So apart from (mostly poor quality immigration) increasing the population, I’m not seeing the sunny uplands to be honest.
The OP needs to sit on their hands for 6 months , while doing their research, and see how the land lies then.

But there won’t be fewer people. Our population is increasing, not decreasing.

As to your bizarre comment about immigrants, I’m one and I suspect paid more for my house than you did.

Where I am in a sought after area of the SE, they are really tumbling down already, bring reduced and still not selling.

Plus people are coming off fixed rates soon, then have people who have to sell.

Lack of supply doesn't counteract lack of affordable credit.

The opposite is happening here. Prices are still going up and they’re still selling. We’re between Sheffield & Derbyshire. A house near us went on for £270k last July. They took it off the market as their sale fell through. They went back on a couple of weeks ago for £295k and sold after 3 days.

@bellac11 yes indeed but with a caveat - house prices often aren't cheap in those prized areas in the midlands and north- the areas where too many people want the same area- in fact some of those areas are as expensive as surrey, berks, Hampshire, somerset, wilts etc . If you look at areas around York or Harrogate for example or Didsbury or Altrincham they are similar to down here in Bath or Bristol on comparable houses and still unaffordable for most

But there won’t be fewer people. Our population is increasing, not decreasing.

It's not increasing because there's more people, people are living longer so we have an ageing population.

Slightly flippant answer, but you will overpay for any house regardless of when you buy it. If yours is to be the successful bid, it will have to be higher than every other potential buyer thinks it is worth at that time.

Slightly less flippant answer - are you buying a home, or trading cash for property as part of some investment strategy? Unless it's the latter, why does it matter? Every single street in the country has people living next door to other people in similar houses who paid a different price for it. Doesn't bother most of them. Not sure why paying more than someone who buys next year is worse than paying more than someone who bought last year is so upsetting.

The decision when to buy isn't just about value, it's also about your personal circumstances. How secure is your job? How long a mortgage term will a lender offer you before retirement? Is your family likely to grow? If those factors mean now is a good time to buy, then today's prices are what you will need to pay.

There are more people receiving benefits than paying tax

this is a distorted figure though as they are including NHS in that I believe so as we have more older people than young people & they statistically use the NHS more it's more taking benefits then paying tax.

We bought over a yr ago & took a 5 yr fix. If I was buying now I would certainly be reducing by budget by at least 50k

The government doesn’t have any money

Although I agree on that point.

Births are declining, the elderly will die, some youngerpeople die too, there will be a point where there are less people, therefore a lower demand for housing.
My comment about immigration was simply because that's the only way I can imagine anyone might argue that's not the case. But after brexit I think it's a bit unrealistic and a bit if a gamble anyway.
I'm not anti-immigrant, my grandparents were immigrants, I was against brexit from the start. Mentioning immigration does not equal anti immigrant. How great for you that you have an expensive house and I'm sure it's worth a lot more than mine. Congratulations?

Very good point. The recent hikes in interest rates haven’t been fully priced in yet.

All very well for posters stating this was said during Covid, but interest rates actually dropped then. We haven’t seen rate rises like this for years.

That said, I would do my affordability calculations and if the right house turns up would look to buy if I could comfortably afford it. But if it takes a year I wouldn’t expect prices to rise by much if at all during that period, if you’re in a typical area.

You said you want to rent it out in the future. Have you fully researched being a landlord? Could you take time out to travel now before buying a house? I’m not sure I would want the hassle of dealing with a rental whilst I’m overseas.

Slightly flippant answer, but you will overpay for any house regardless of when you buy it. If yours is to be the successful bid, it will have to be higher than every other potential buyer thinks it is worth at that time.

Flippant answer - coincidentally the seller will always end up selling it for less than it's worth. They have to take money off the price until someone will take it!

Less flippant answer - that's how markets work and how they value assets. It makes sure the house is allocated most efficiently. The house has more utility (so it's worth more) to the person who makes the highest offer. Otherwise they wouldn't offer it.

We bought after the last crash and supply was limited as everyone who could just waited it out. I don't think the crash this time will be the same with prices rising so fast post COVID and demand still being high I think it will be more a static phase for decent sized houses. We are currently on round 2 of a multiple offer situation on a renovation we would like, can't believe the seller hasn't gone to best a final yet. Longer mortgages are also easier to get which will prop up prices

I remember watching a news item in 2002. They interviewed several people who had sold their homes and moved into rental properties. They all believed house prices were about to come tumbling down and they would make a fortune. Would love to watch a follow up!

House prices don't "exist". The house price indices are, at best, a lagging indicator of actual completed transactions for similar houses, bought by other people, from other people, with different needs, circumstances, and concerns, extrapolated and generalised to any house.

A valuation for a house isn't real any more than "28 degrees centigrade" exists and is real. The latter term can at least be used to describe attributes of real things that do exist, like air temperature on a sunny day, but it is only when a buyer and a seller reach an agreement to transact at a specified price that it can be stated as a fact what that house was worth on that day. In between those actual transactions, it's pure guesswork.

So all this talk of prices dropping (or rising) as if there is some law of the universe which can be predicted and exploited is ridiculous. If you want a house that is for sale, you need to bid enough to make it worth the seller's while to sell it to you, rather than anyone else who is interested. If no-one else is interested, then only the seller's opinion about the valuation applies. That is true whether you buy today, tomorrow, or next year, and it remains true whether the date you actually bought coincided with a peak or a trough in any market index.

10 years of renting and you have nothing to show for it. 10 years mortgage and you have 10 years of equity even if value stays the same.

And the Reuters article talking about a recession talks about a 0.8 contraction in the economy before back to growth in 2024. Hardly the end of the world. A lot of amateur experts being dramatic.

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,

Good point. I was in negative equity in the 1990s with my first flat, at one point worth about 60% of what I'd paid for it. I wanted to sell as I was moving in with dh, but no way could I take that hit so rented it out, waited a few years and sold for 50% more than I'd paid for it.

Also op, whatever percentage house prices fall by, remember it won't apply to every house. Some will retain their value because they're properties that are in high demand in popular areas. The very big houses in the area I live seem to be retaining their value - for the moment at least - because there aren't a lot of them and they don't come onto the market very often.