Property prices

[Asian]

Hello All,

We have recently made offer on a house. We did offer the asking price £425000. The surveys are through, no major issues. We are in process of enquiries. We have 10% deposit. We are going for fixed mortgage of 5 years. Considering the current market, it stresses me to think if we would have issues remortgaging it after 5 years. Any suggestions would be appreciated.

They do/will though because they don't want stacks of bad loans.
Government backing makes some difference but still.

When will they?
Because they don't at the moment and a 10% deposit has been perfectly normal since I've been buying/selling from the late 1980s onwards & there has been plenty of turbulence in the market during that time.

We're going for 5 year fixed, if you can afford the current rate comfortably and are happy to commit to it for 5 years. Can you afford to overpay on top, will put you in a better position when it comes to remortgage in 5 years.

I have no idea what lenders may or may not do. I do know that there is plenty of turbulence in the mortgage market at present, rising gilt yields and falling prices though.

Previously you were arguing that lenders will decide what is an acceptable deposit based on whether they think prices will rise or fall "because they don't want stacks of bad loans". Now you admit you have no idea what lenders may or may not do.

What I meant, @Twiglets1s is that lenders will tighten their lending criteria, a credit crisis. What any individual lender will do and when clearly can't be predicted.
My initial point was that a 10% deposit in a market which is expected to fall at 10% is potentially concerning.

The subject being discussed wasn't whether or not lenders would tighten their lending criteria, it was whether in future they would require more than the usual 10% minimum deposit. You seemed to think they would "because they don't want stacks of bad loans" but have changed your position when asked to suggest when that would happen.

This whole debate is not helpful to OP - all because you couldn't accept that a deposit of 10% is small but not unusually or very small. In fact it is a pretty normal deposit for a FTB, which they may or may not be.

Actually that is no what was being discussed if you look back at the previous posts above. Have a read!
I'm not sure why I need to keep repeating myself. Again, a 10% deposit is very standard for a but too small for comfort when prices are expected to fall by this amount or more. The OP is clearly anxious so it is relevant. Your other comments are unhelpful

It was exactly what was being discussed. Glad we finally agree that a 10% deposit is very standard.

Always take property market predictions with a pinch of salt. Many times previously falls have been predicted but not happened or the market has then bounced back fairly quickly.

If you like the house then buy it. Don't reduce your offer though, that would be unfair and unethical.

Yes, broken clocks etc, but real evidence is now upon us - not predictions. Try checking out "Moving Home with Charlie" recent videos. He's an industry expert with no obvious VI. Even he has changed from "buy if you need to/want to" - to - "Don't buy now unless you have to".

Gosh, you really are hard work @Twiglets1. You just keep hammering on with your (rather irrelevant) point and don't listen to others.

Oh hi there, just popped by to insult me did you?

hi, in the current market you have more options than you think. it is a buyer's market - sellers are putting their property up for over-inflated prices. If the price you offered (albeit accepted) is now not looking great for you because of circumstances you didn't think of before, you should definitely make a lower offer now and explain the situation. You have to think of yourself and your family's finances, you are not bound to this house by a verbal agreement at all, no matter what other sellers on this thread say about it being a "dick move". People (by that I mean sellers) are panicking.

Also, tracker/variable rates are currently lower than 2-5 year fixed rates, so you could also consider that. Currently, it is a buyer's market, but I don't personally feel you had too much competition if the seller accepted the asking price. If there were even other offers (how would you possibly know?), maybe those people made a much lower offer but were rejected, but then you came along and the seller just leapt at the opportunity. When there's real competition for a property, the price usually goes above the asking price. Just because an EA says others are making offers, it doesn't mean they are competitive offers.

Personally, I would be very careful with my finances right now in the housing market and only purchase a property at least 15% below asking price. This is the minimum buffer you will need in a housing crash with high interest rates. Many believe the housing prices will drop further in the next few months (irrespective of interest rates). The problem in the market right now is unrealistic property prices (i.e. they are overpriced). You should definitely do more math work and figure out if the price + interest you're paying now is actually worth it if the house depreciates (it probably will given the current market). Good luck