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?

I think anyone who thinks mortgage rates will be down to 2-3% within the year has their head in the clouds.

I think that's a very optimistic outlook.

If you are going to put off moving at present, I would make sure you are happy staying put for at least 5-7 years.

I was buying a flat when the twin towers came down, I was advised not to continue the purchase. It’s always a gamble if you try and play it. You’ll always need a roof over your head though

says the perennial renter.

I don’t think it’s sustainable to have it that low. Money should be better in the bank gaining interest.

Quite right. We pay £1200 for our two bed bungalow it would cost about 650,000 to buy with a 5% deposit last time I checked it would be over 3k a month to buy it. We are mid 50s. You cant just assume your circumstances are everyone's,

We have a rent increase from June 75.00a month from 1125to 1200

I'm not sure @socialmedia23

I don't envisage prices falling enough to compensate for the higher interest rates on a larger loan size, but I'll have to do the maths when the time comes. Fortunately I've still got a couple of years to think about it!

I completed on my house last year spring.

At the time it seemed like a bad time cos I got stung by the raised stamp duties rates. And again it looked like prices might fall. And the war in Ukraine made everything uncertain, but persisted with the sale.

But I benefitted from a great mortgage rate. House prices seemed to have somehow continued to rise- not too happy about this- cos in the end how are my kids ever gonna afford a house? And the the economy just went crazy in Autumn. With mortgage rates rocketing.

So at the time it seemed like a bad time to buy but a year later people would probably say it was a good time.

You wont be able to truly say if it's a good time to buy right now until at least 2 years in the future and by then it may be too late to benefit from anything that might help now.

You did the right thing @Rowthe

I bought in 2020 and locked into a 5 year mortgage at 2%, despite everyone insisting that it was a stupid time to buy and that prices were going to fall.

Since then, both mortgage rates and house prices have increased significantly. If I hadn't bought, I would have paid almost an extra 3 years worth of rent by now, my rent would likely have increased significantly, I would have no equity, and the value of my deposit would have been eroded by inflation.

Telling people to wait for a crash before getting on the ladder is dangerous and stupid advice imo. Of course there is a risk that prices could fall once you get in the ladder, but the risks of not getting on the ladder are usually far greater.

I think if you don't really need to move its better to wait for things to settle down, the market will take a year or so to come down to its new level. Which may be quite a lot lower - considering the forecast for higher interest rates for longer. Its now predicted to possibly be 5% or over by the end of the year. Its seems impossible now that house prices don't go through a period of negative correction.

Just increased by another 0.25%.

Not necessarily. Historically house prices fall rarely and if they do only for a very short time.

Today there is still a big shortage of houses to buy and there is a lot of free cash around. This is the first generation where large inheritances are becoming commonplace. People tend to put spare cash in property.

I think its dangerous to put too much faith in predictions.

The mortgage rates early last year compared to the end- show that even the experts can get it very wrong.

I'd been waiting to buy since about 2015 at least.

Every single year the sentiment was this is a bad year to buy, let it settle for a year and it should be better. And every year it steadily got worse.

@Rowthe just shows there's never a good time to buy. We bought in 2018 and were told to wait for prices to fall. 5 years later house prices around us have increased by 28% based on houses sold here.

Yes I can understand that and empathise. This time I really do think it could well be different though. For the past decade the government supported the market with schemes like funding for lending, help to buy and shared ownership. In addition we had emergency low interest rates that came to be seen as normal. A lot of that has reversed - and then add on the cost of living crisis and the fact that international markets think the UK government credit is maxed out and can't endlessly borrow increases amounts to bail out various sectors (evidenced by what happened after the famous mini budget). One things for sure, we are in a time of huge uncertainty that looks potentially worse (in a different way) than the last crisis of 2008.
Who knows what will happen. Its best to look at both ends of possibilities though so that neither catch you out imo.

What I would say I'd.

House prices seemed to be dropping just before the Stamp duty holiday.

Houses were rapidly being reduced in price. And I'm here sitting on the sidelines to bag a bargain- except no one was selling. The amount of houses coming for sale were very limited and not really the family house we were ready for.

So again that's something to consider. When it's a good time to buy, people will only sell if forced to.

Why are you thinking of taking your house off the market?
Because you think rates will come down significantly in another year?
Because you think house prices will have fallen more in another year and want to upsize?
Because you can't afford a bigger mortgage at these rates?
It depends what your reason is and how much and why you want to move.
The likelihood is that rates will rise and not come down significantly in the near future. The days of ZIRP are gone in this high inflationary period.

Mainly because of the rising costs! We don’t have much equity in our current property so we are relying quite heavily on a mortgage. We are currently in a five year fixed term with a decent-ish rate as we remortgaged last summer.

This thread has been super helpful and it’s given me some new perspectives to consider!

@Amtheyest17 I don't think that now is the time to be stretching yourself financially unless you really need to move. Far too risky.

The implications on increased interest rates may affect everyone that has borrowing, car loans, including businesses that quite often borrow to invest in their business..That might affect the cost of living in the near future.
it's all looking a bit grim.
and I studied economics for 6 years several years ago and I've kept an active eye on it for the last 30 plus years.

@RollerCoaster2020 -more than a bit grim, I'd say! 😞

Depends whether you're trading up or down in price terms.

if you are trading up to a bigger flat (london), when would be a good time to buy/sell?

Thinking of taking my flat off the market and sent an email to the agent (who predictably reassured me there was 'lots of interest'). Personally not desperate to move yet but would like to one day so think its better to sell before I absolutely need to move.

I am by no means an expert. However, I am waiting to sell until next year. I listen to a lot of political commentary shows (for my sins) and the general consensus is that this will be the last interest rate hike and then things will start to fall. According to 'experts' we should also start to see the lower food costs coming back in by the end of the year too! The other thing to consider is that there is a general election next year... true to form I expect the Tory party to pull a rabbit out of the hat when it comes to buying and selling properties in the hopes it will help paint them in a more positive light! Could be wrong, but it makes sense! Whether people like it or not, this country relies on a booming property market and many millions don't want to see it coming crashing down!

www.imperial.ac.uk/business-school/ib-knowledge/finance/how-central-banks-interest-rate-rises-affect-the-richest-and-poorest-families

low interest rates actually enhance the wealth of the richest families because they are able to access cheap credit to acquire assets. And their higher incomes further inflate the prices. For example, if you are a middle earner on £100k (combined or otherwise), you can maybe borrow £450k (4.5 times income). But someone on £200k can perhaps borrow up to 5.5 times income so that it is well over a million and it is over and above what you can afford. Due to the huge discrepancy in salaries/wealth, there is huge differences in what people can afford. Low interest rates further exacerbate this as it becomes cheaper to borrow against the value of your existing assets (which richer people tend to have) and that is why there are so many buy to let landlords. So while we could have borrowed cheaply in the past, most middle earners only have 1 property (unless they are older) and so compared to the rich who could accrue assets in the low interest rate environment, we were steadily getting poorer.

“There are some clear winners and losers. When rates fall, disposable income rises for high and low earners, but it’s households within the top one per cent of income who benefit most. We found a one percentage point drop in interest rates boosted the incomes of these top earners by five per cent over two years, while the lowest earners saw only a 0.5 per cent rise. Those in the middle saw an increase of 1.5 per cent in their income.

What is going on?

While lower rates do indeed boost employment, particularly among people with lower incomes, these higher earnings are eclipsed by the benefits the better off enjoy, in terms of healthier share dividends, better business income and cheaper interest costs.

We witness a similar imbalance if we examine the impact of lower rates on the value of assets such as property and stocks. Again, cheaper money brings gains across the board, but these are more pronounced among the better off. A similar rate drop over two years boosts the value of assets such as property by 20 per cent of disposable income among poorer families, but by 75 per cent at the top of the scale. Lower rates have a larger impact upon the value of assets than they do upon disposable income – and the wealthier have more financial and real assets. ‘