Buying property- what’s different now?

[Housingdestressnotdistress]

Genuine judgement-free question. Not trying to start a ‘in my day….’ thread.

there are a lot of questions coming up recently about it being a risky time to buy, especially with a lot percentage deposit and needing to move after 2years. Has that not always been the case? Or is there something about ‘now’ that makes it different?

DP and I are in our early thirties. My friends also bought houses in their late twenties up to late thirties. Everyone I know put down at least 10% deposit. They don’t all have glamorous jobs. They picked houses/ locations based on where they could have 10% deposit, which did involve moving out a bit. likewise with rented houses, those who had an aim to buy, rented rooms in house shares while we were making less and need to be near city centre, with the goal of saving 10%, and when salaries went up and they wanted to move away from house shares, moved out of the city (if they could afford it and still reach their saving goals).

I’m one of the last of my friends to buy. I could have bought in my early/ mid-twenties but didn’t because I was told by so many people not to buy unless I intend to stay there for 7 years!

It's always a risky time to buy. We bought our first flat in 2019 and were concerned about the impact of Brexit on house prices. As it was, the pandemic happened and we sold in 2022 for just under £30k profit. Of course, the house we moved to had also increased in that time by more than £30k but we'd had salary rises and the profit on the flat made it possible for us to move.

Personally I would never put down a deposit less than 10% (ideally more) as I'd always want a cushion in case of price drops to try to avoid negative equity.

we wouldn’t either because of the reason you said.

i don’t know anyone who has had less than 10% and bought with the idea of having to move again in 2years.

agree with previous poster - always a risky time. Whether it’s recession, brexit, interest rates, mortgage rates, cost of living…ultimately you have to bite the bullet and buy before you can’t afford to. House prices in London and the south east at least you need to think of as a long term investment - there is not enough stock, they are likely to keep on increasing in value. You may get odd years with decreases but like the stock market you need a long term approach.
And also you need somewhere to live!!!! And rent is nothing but wasted money.

@Rasplolly thanks. I’ve never lived in the SE so probably haven’t seen runaway prices. Is it harder to move further out?

For cities in the north, I know a few people, DP and me included, who just move 1-2miles down the the road and found biggish price differences, so the deposit % becomes higher. An extreme example, but one of my friends just crossed a main road, which meant she technically changed areas but the same style house cost 30k-50k less, and is same distance walking from trendy shops.

You’ll get people who pay over the nose for things which others would think of as silly (sparkly new kitchen, particular postcode, catchment area for school etc). You have to decide what’s important to you. If a particular postcode doesn’t bother you (wouldn’t me!) then go for the cheaper house!

But you say you didn't buy because of uncertainty for how long you’d live there, and then say who lives somewhere for only 2 years?

The people a crash would largely affect is those whose circumstances change either predictably or unpredictably.

We are 35, haven’t bought, because we’ve lived primarily in expensive locations with average jobs, and also because we were never planning on staying in said locations. In hindsight with a bit of extra parental help we could have bought 10 years ago, and sold when we needed to. The silver lining (which is fairly minimal compared to the missed equity build/not paying rent (£100k)) is that we’ve secured decent jobs elsewhere. Unfortunately for us it’s still not the place we want to live long term (we hoped it would be), so we will try to use our current jobs/career movement to find decent jobs in another (fairly expensive) part of the country.

Money is a big obstacle to buying, but for me at least, knowing where you want to live is a far larger one.