Page 2 | First time buyers unite

FlyingSoap · 2023-06-15T16:33:13+00:00

What does everyone think to the rates? We are having another conversation tonight about it but in all likelihood we will be stopping viewings. I don’t want to saddle us into eyewateringly high repayments, when our rent is half the price of what a mortgage would be. Have a deposit sitting in savings but just keeping a watchful eye, as would hate to lose it to negative equity. Wish it was easier for everyone! What is everyone else thinking?

ThankmelaterOkay · 16/06/2023 09:19

We figure we’e spent £100k+ on rent, what’s a few thousand more.. 🤣

PaperNests · 16/06/2023 09:28

We're in the same situation. We've stopped viewing houses mainly because nothing has come on the market in our budget for the past few months now. We're older FTB's with 2 kids and we'll be buying a much smaller home than we're renting and paying a lot more per month, around double, so I'm not excited about the prospect. But I feel like we really have to buy it's just got to that point where we really need to. As soon as something suitable comes on the market we'll be going for it and I expect to be competing with a lot of similar buyers. There's a real shortage of starter homes here.

Housingdestressnotdistress · 16/06/2023 10:10

To everyone who’s stopped viewing houses to wait, how do you know when the bottom is? Are you stopping checking Rightmove entirely?

Original poster

FlyingSoap · 16/06/2023 10:16

PaperNests · 16/06/2023 09:28

We're in the same situation. We've stopped viewing houses mainly because nothing has come on the market in our budget for the past few months now. We're older FTB's with 2 kids and we'll be buying a much smaller home than we're renting and paying a lot more per month, around double, so I'm not excited about the prospect. But I feel like we really have to buy it's just got to that point where we really need to. As soon as something suitable comes on the market we'll be going for it and I expect to be competing with a lot of similar buyers. There's a real shortage of starter homes here.

Agree entirely, it’s as if all the starter homes are snapped up by landlords

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PaperNests · 16/06/2023 10:20

@FlyingSoap yes I think they are. Where I am there are streets and streets of 2-bed terraces which we are looking for, but nothing ever comes up except at auction snapped up by a cash investor. The markets full of overpriced 3-bed semis we can't afford now the rates have gone up, but could have 10 years ago when we hadn't got our deposit together. It's frustrating isn't it! Just waiting for those landlords to start selling and hope they're not in too bad condition.

Original poster

FlyingSoap · 16/06/2023 10:28

PaperNests · 16/06/2023 10:20

@FlyingSoap yes I think they are. Where I am there are streets and streets of 2-bed terraces which we are looking for, but nothing ever comes up except at auction snapped up by a cash investor. The markets full of overpriced 3-bed semis we can't afford now the rates have gone up, but could have 10 years ago when we hadn't got our deposit together. It's frustrating isn't it! Just waiting for those landlords to start selling and hope they're not in too bad condition.

We’re the exact same as you. It feels difficult doesn’t it, especially to know on the same incomes you could’ve afforded something suitable years ago before interest rates went crazy. Moving to a starter home while rates are high would be a bad choice IMO in case you need to sell or even remortgage after the fixed rate ends, and you end up on the SVR or unable to sell. It’s a scary prospect!

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KievLoverTwo · 16/06/2023 10:29

Housingdestressnotdistress · 16/06/2023 10:10

To everyone who’s stopped viewing houses to wait, how do you know when the bottom is? Are you stopping checking Rightmove entirely?

I still have alerts set up for one area so I can monitor if buyers are starting to ask for more realistic prices.

I guess I will get more serious about buying when one or three or possibly all
three things happen: a) BoE stop raising or decrease interest rates b) inflation drops considerably, to at least less than 4% and c) I see prices come through that are lower than the ridiculous summer 2022 explosion.

There will be a fine line to be drawn. When all those three things happen, there will be an explosion of moving activity and houses will end up in bidding wars.

I will be happy enough with increasing our savings by 20k or more and at least one of those above things to happen. If I wait for the perfect storm we will just get caught up in a market with bidding frenzies, and I want no part of that. I would rather pay a higher interest rate for a few years than deal with the stress of that.

Housingdestressnotdistress · 16/06/2023 10:40

@KievLoverTwo thanks. That makes sense. We bought last year in the peak at a low rate(sub 2%). A month after exchange a nicer house down the road listed at the same price and I was convinced it was start of the fall but it sold for more than we paid. FIL said there’s no good time to buy. They kept their houses in the early 90s and rented them out but struggled to find somewhere to buy because so few houses went up for sale and had to compromise on their onward purchase

ThankmelaterOkay · 16/06/2023 10:43

I don’t think there will be the crash people envisage. It’ll be 10% nominal fall max over probably a 3-4 year period from August ‘22 to Summer 25/early26.

The slow burn of people coming off fixes is exactly that, slow.

The vast majority of cheap 5 year fixes will have ended by 2025, although there are a lucky few who are locked in until 2027, or who took out very reasonable 10 year fixes up to early ‘22.

So a bottom will be fairly drawn out really. It’s not going to start bouncing back up because FTB all decide this is the time to buy. Affordability has been monumentally changed, and the market will very slowly reflect that.

Original poster

FlyingSoap · 16/06/2023 21:24

ThankmelaterOkay · 16/06/2023 10:43

I don’t think there will be the crash people envisage. It’ll be 10% nominal fall max over probably a 3-4 year period from August ‘22 to Summer 25/early26.

The slow burn of people coming off fixes is exactly that, slow.

The vast majority of cheap 5 year fixes will have ended by 2025, although there are a lucky few who are locked in until 2027, or who took out very reasonable 10 year fixes up to early ‘22.

So a bottom will be fairly drawn out really. It’s not going to start bouncing back up because FTB all decide this is the time to buy. Affordability has been monumentally changed, and the market will very slowly reflect that.

V true, we’ve not seen the full impact just yet

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Original poster

FlyingSoap · 17/06/2023 17:17

KievLoverTwo · 16/06/2023 10:29

I still have alerts set up for one area so I can monitor if buyers are starting to ask for more realistic prices.

I guess I will get more serious about buying when one or three or possibly all
three things happen: a) BoE stop raising or decrease interest rates b) inflation drops considerably, to at least less than 4% and c) I see prices come through that are lower than the ridiculous summer 2022 explosion.

There will be a fine line to be drawn. When all those three things happen, there will be an explosion of moving activity and houses will end up in bidding wars.

I will be happy enough with increasing our savings by 20k or more and at least one of those above things to happen. If I wait for the perfect storm we will just get caught up in a market with bidding frenzies, and I want no part of that. I would rather pay a higher interest rate for a few years than deal with the stress of that.

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Me too

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Wanderergirl · 20/07/2023 12:38

We have 10-20% deposit, depending on property prices as we’re looking at quite wide range. But we’re very picky. So although we view very top properties on our books, it’s normally just one/two properties a month. Definitely not entertaining half standing tiny houses with “maybe we’ll get lucky” valuations.