Am I crazy for buying a house now?

[magneticmoon]

The back story is I've been trying to buy for years, had several fall through, for different reasons during the process and have found it all really hard and upsetting at times. I've finally found a house - what I would call a decent one. Not very old, a good price compared with other similar properties listed online.

For context I'm a single parent, I work full time in a professional role but there is just me earning. The mortgage will be about a third of my Income. And almost double what I've been paying as rent in a much smaller place, and for a long time.

I was feeling reasonably happy about this, but a friend has commented, thinks I'm mad to even be considering buying now, with what they see as harsh economic times, looming recession. Their view is I'm brave or crazy to consider it.

I know there is a risk. My job is relatively stable and secure but that could change. Something could happen personally or economically.. these are the risks you take in buying. Though I've never bought before. I'm not sure what the alternatives are - staying in a small rental, for however long and then what.

Is it really crazy to buy now, or would you just go for it in my position?

Renting is massively unsecure and desirable properties are in short supply. Sooner or later there will be another surge in demand and buying then will be worse.

Try looking for new builds 10-15 years within a half a mile radius on similar looking roads or estates.

The thing I find with new builds is that they are overpriced to buy in the first place, so vendors selling generally keep prices artificially high for a good five or so years after build finish.

That seems to drop off around the ten year mark.

Oh and lots of folks have to live on or near busy roads.

Triple glazing and thick curtains exist - triple glazing would help with re sale.

Why are you getting worked up about @rainingsnoring replying to comments?

House price values don’t exist remember. It’s worth whatever you decide it’s worth as you never ‘have’ to sell. Wasn’t that your argument?

https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fab120f92-fa1b-4094-aff1-38f136bb104f

As with the above link, no one in London has to sell, so crystallize any losses as there’s no such thing as forced sellers, that have bought in the last few years.

I did say I wouldn’t reply anymore and we’ll pick this up again in 12 months to ‘reevaluate’ your argument, but I just thought I’d reply to this swipe at @rainingsnoring

This is a problem if you want to sleep with the windows open, or enjoy the garden, and there is the pollution aspect as well.

@electriclight ”Most serious commentators think we will avoid recession and that interest rates will start to come down at the end of the year, but that house prices are coming down regardless.”

After yesterday’s inflation figures, the BOE may well be going another 0.5% by July as they drag their feet.
I can’t think of a scenario where BOE will lower rates until they basically match inflation, which is where they should be anyway.

Difficult one OP, if only we had a crystal ball eh?

Article in DM (yes I know 😂)this morning saying BOE are predicting three more interest rate rises.

Also many more properties coming onto the market. The previous rising of property prices during 21/22 were due to lack of stock during the race for space. We viewed bungalow that we thought was overpriced at £315k the EA said oh! We have already had 3 offers over £350k, I think it sold for £370k in the end, crazy times.

I am noticing now, some Auction properties are now going unsold, this wasn’t happening before in our area EA.

DS1 & his GF are ftb, they are holding off to 24. But who knows.

We have bought and sold many times, we have lost & made money over the years, these are a few examples of our moves, in the late 80’ bought a flat SE. £42k valued two years later £26k! took 10 years before we could sell it on for what we paid for it. Next property, while we were still waiting for first property to recover in price, also SE paid £72k sold 11 years later £255k, property always comes up in the end.

If it’s a house you love, and you intend to stay long term, and you can afford potential interest rates rises or can fix for 5 or even 10 years at a reasonable rate. Perhaps purchasing now could be the right choice for you vs renting. Good luck with whatever you decide.

I think most of the posting on here gets it right. Buying a home, in the long term, makes sense on so many levels.

Should you buy now ? No not unless you have to, better to get yourself the best deal possible by waiting and saving for a little longer to get a better house cheaper.

I read several articles today suggesting the base rate will have go up to 5% towards the end of this year. The knock on effect of this will definitely be cheaper houses - and if you can wait until interest rates show signs of coming down again - you will also get a cheaper mortgage. Waiting is a win win imo. Having said that if you need to buy now just get on with it. In 25 years when it's paid off you won't be worried that you missed the opportunity to save on the purchase price.

The BoE can’t raise interest rates above CPI, because the government goes bust. That’s the difference between now and the 1970’s. Our debt to GDP ratio is 99.2%.

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/february2023

What this means in reality is inflation is going to be with us a very long time and comes in waves. I’ve outlined this for several years on here in previous comments, back when neigh-sayers were stating that the trillions of QE printed and injected as stimulus into the economy wouldn’t result in inflation.

The only way to bring inflation down is recession, and that’s precisely where we are heading and unfortunately it’s a necessary evil that the BoE will take.

House values are product of credit availability, affordability and supply. It doesn’t take Eienstein to work out what happens when that reverses.

I don't think you are crazy. I think you would be more likely to regret not buying

Presumably you are private renting so could be asked to leave at any point by your landlord. Lots of landlords are selling up at the moment. If so buying now is more sensible.

25% deposit and you work for the Civil Service?

What are you waiting for?

Do it.

@electriclight and @Lightscribe -thank you!
I don't know why @Mark19735 has to take the fact that I don't agree with him about the economy or house prices so personally! I thought we had agreed to meet up on her with @Lightscribe and perhaps one or two other posters next Spring to see where the housing market is at that point.
I would urge caution at the moment when the economic situation is so uncertain, others may feel differently which is fair enough.
Good luck to @magneticmoon whatever you decide.

I remember in the 2010 recession which was a bigger problem for mortgages with banks refusing to offer a very vocal person at work who was older than me holding out for a predicted price adjustment, we were 2 years into a mortgage and they wanted to tell us it was a mistake. 3 houses later we are now well set up through years of paying mortgages. Price readjustment never happened as only the desperate sold. I know people who sadly sold expecting houses to reduce in value and couldn’t get back on the ladder ever.

I agree with all of this. Having bought our first house in 1991 when they were dropping in price and continued to drop after we bought, I can totally see prices dropping again. People find property dropping in value hard to believe unless they see it. That said, my daughter and husband are just buying a flat in London. For many reasons, including negotiating a relatively low price, they think it is a good time for them to buy so it's not like no one should buy but property prices do fall and there's every chance that after you have bought your property all fall in price again. I can remember this happening to my cousin in the 90s where he couldn't sell the property because the mortgage was then more than the value of his house.

Hi all,

We are desperately looking to move from London to any area around.
We are a mixed family with 2DD, and looking for a safe place for children, commuting to London St Pancreas 1 to 2 days per week. Our Budget is 400k.
Is it any place suitable for us? Likely 3 bedrooms.

Thank you in advance😎