Has anyone taken their house off the market due to mortgage rates?

[Amtheyest17]

We are currently on the market and having trouble finding somewhere to buy. Looks like we may have a couple of offers coming our way but I’m getting cold feet and considering taking it off the market and staying put. Really doesn’t seem like a good time to move!

anyone else in the same position or thinking the same?

Not me. But a family member did this a few months back. Too much risk overall on the price of the property they were buying.

Rates are on the up. What if this is the lowest it is going to be in years? Can't put life on hold indefinitely.

@lemonyellows if rates are on the up and don't come down then house prices will have to go down.

You are correct.

Last interest hike meant to be in summer. Mortgage rates already started dropping from the peak. Depends whether you're moving up or down the ladder as to when is best to move.

Economic theory states that as interest rates rise the asset prices must fall, but I wouldn't trust the government to not artificially keep prices high.

85% of all uk GDP is in house prices so if the housing market collapses, the whole economy will come crashing down.

You can't bet on price falls, because supply is so low and demand for housing is always high - currently if you can purchase a house your mortgage repayments will still be lower than rent, so there is still financial sense in purchasing.

Also from cash buyers, supported buyers and downsizers there is still demand.

However, if you have any feeling of economic uncertainty I can understand not wanting to overstretch - will you personally feel overstretched, more at risk of getting into difficulty?

Depends why you’re moving- I wouldn’t trust a lower rate for years and years and years to come. Yes the house you want to buy may become cheaper but your home will also sell for less.

currently if you can purchase a house your mortgage repayments will still be lower than rent, so there is still financial sense in purchasing.

That simply isn't true right now for everyone due to interest rates going up.

If we bought the house we rent, a mortgage would be about £200 more than we currently pay.

I would be interested to know more about these figures as the latest I saw in my area is rents are rising to cover the increased mortgage costs - and rents are rising faster than mortgages.

I am not saying you are wrong as local prices differ, but it would be interesting to see some figures.

Even if a mortgage were £100 or £200 more, that is still a better investment than renting, if manageable.

Our landlord doesn't have a mortgage.

You don't need my figures as I'm right!

We're going to ask if they'll sell a bit later on in the year.

@NoWordForFluffy I just did a comparison on Chester (no reason, it was the first place that popped into my head), and the price for a mortgage and rent on a 2-bed house were broadly similar, rents between £800-1,200 pcm. Deposit size obviously a massive factor, and you could extend the term of a mortgage dependent on age so the mortgage price also variable.

In my area the shortage of available rental properties is meaning rents are way higher than you would pay on a mortgage even if you had just 10% deposit.

I think the viability of AirBnB for landlords may be a big factor in local market rates too, as that takes so many homes out of the rental supply pool round here.

My figures are right in my circumstances. I have looked, so know.

We can't extend the mortgage term as we're too old and we won't have a massive deposit.

Your comparisons are utterly utterly pointless as I know I'm right.

I didn't mean I wanted your figures, I just meant I was interested generally.

In my area there is an acute lack of supply in the rental sector, so rents are ballistic - and people end up bidding more to get a place. It is depressing, and the AirBnB issue is making it more so.

Good luck buying your place.

Yes, but we've been in the house over 8 years so our rent hasn't kept up with market rates completely (plus they've not maintained it amazingly well, so it couldn't command massively high rent even if it went onto the open market as it's not the quality which allows this).

And thank you. We might not get anywhere as he's most likely deluded as to the house's sale value! Time will tell, mind you.

"Last interest hike meant to be in summer."

I think this is what the market is saying. Is supposed to depend really on UK inflation, but in fact appears to depend mostly on whatever the Fed does.

Our inflation is already running very hot due to too low rates. The US is running (much) lower inflation and higher rates. Our rates are currently far too low, so it will be interesting to see if the BOE continues to follow the Fed (and continues to allow inflation to rip) or actually gets serious about doing something to control it. At the moment they appear to be hoping their forecasting models are correct. I would add that the Bank of Englands inflation forecasting reliability is absolutely woeful.

"Mortgage rates already started dropping from the peak."

Anyway, mortgage rates, they spiked during Truss and were coming down from that spike til about the start of April.

Here is an interesting article from the ONS.

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/monthlymortgagerepaymentsup61foraveragesemidetachedhomeintheuk/2023-03-08

I think it depends on so many factors that you have to work out what is right for you.

We are moving. Our fixed rate mortgage ended, we will be extending the term of the new mortgage slightly (4 years) but the difference between the two mortgages is about £100 more for the new house. We don’t want to get trapped in this house for a number of years, especially with such a small difference in mortgage. We have stable jobs, DH is hoping for a promotion next year and will pay off his student loan in about 18 months freeing up more money to overpay the mortgage. We are buying a house that we can be in for a number of years and so can wait out a fall in the market. So for us, moving really is the best choice for us regardless of what the interest rates or the market is doing.

General consensus from economists and the market is that mortgage rates are going to continue going up this year and wont start to ease until early next year. Just as the rate increases have been gradual, so will the rate decreases. So in reality, it could be 9-12 months to see rates come back to the level they are today, let alone go to 2-3%.

This will negatively impact house prices, and I think we're only just starting to see the house price correction that is coming. The bottom is yet to come! So, personal opinion, if you can afford to hang tight for 18-24 months in your current place, then wait it out. Otherwise, I'd sell now rather than later because prices will continue to fall.

Things might be different if you're in prime zone 1 London (e.g. South Kensington, Chelsea, Fulham, Westminster etc.) because you have significant outside demand, but definitely not if you're in the less popular areas.

Just my two cents.

The bottom is yet to come! So, personal opinion, if you can afford to hang tight for 18-24 months in your current place, then wait it out.

If you are already on the property ladder, you have to balance whether waiting will deliver enough of a saving to compensate for two years of not living in the home you want.

Any up/down price fluctuation on both your house and the next one you buy has to be quite sizeable to make it worth factoring in.

I'd agree with that.

Another 0.25% rise in rates today should help move stuff along.

Following. i am thinking of taking my flat off the market and waiting till next year. As I don't need to move urgently.

I'm not due to remortgage until the end of 2025. I was planning to upsize at that point, which would involve taking a bigger mortgage, but I won't do that if rates remain high.

If rates are high then I will stay put and pay off more of my existing, smaller mortgage before upsizing. I reckon that rates will peak towards the end of this year though.

i was wondering if prices fell, it may be worth upsizing even if rates are high? Cos its so rare that house prices fall. I am in London though and in a flat planning to upsize to another flat and apartment prices have been flat since 2016 (I bought in 2019 though!)

All unchartered territory I know.

I've been saying prices are due a fall since 2000.

But still the government props them up with new initiatives. Help to buy. Shared ownership. Stamp duty holiday and rates for FTB.

Etc
Every time you think they might fall, they pull out something else to prop them up.

It's only when they have nothing left will they let the proces fall. But at that time I would expect a huge crash and the economy to be in tatters anyway

It will be interesting to see how the new skipton renters mortgage affects things. Presumably these are quite limited, potentially it could unlock quite a few new buyers that may negate the higher rates.
that said, the market is very very slow at the moment where I am. With little new stuff coming on