Interest rates?!

[Potaytoe5]

I knew it was coming, perhaps I should be following the situation more closely, but interest rates gone have gone up AGAIN?! I thought they might do around September.

I'm getting quite worried. Just about to put our house on the market- photos are being taken on Monday- I hope we won't have to drop the price too much.
We're upsizing, so hopefully whatever we're buying will also drop in price.
I really hope it won't take us forever to sell. Argh. So frustrating.

I'm wondering whether we should stay put, but realistically we need a bigger house to fit the kids and DH's home office.
Extending wouldn't add enough value to the house to make it worth it.
I guess I'm just having a moan 😵

It's crazy isn't it, on paper ours looked like and easy decision when we started out but it's really making us think again!

I wanted us to move a couple of years ago, but pregnancy and then non-sleeping DC2 made it difficult to finish renovating our doer upper.
Now it's done and we need more space, this is happening :(
On paper it looks like we could just stay put, we have 2DC and a 3 bed semi, but DH works from home 80% of the time, taking up the smallest bedroom, and there is an age gap between the kids that they would have to stop sharing soon anyway.
Extension would be v costly and not solve all the issues. We also have to move areas for a bigger house, which I don't want to put off for too long as DC1 will need to change school.
I think we might have to try to move anyway, just go for a cheaper property so we can aim for having 50% LTV...

Rates weren’t quite as bad when we were accepted for our mortgage in February. I think we’re on about 4.3% We moved in April. No regrets, we really needed a bigger house and we can stay here forever if we want.

It did take a long time for our house to sell though, it went on the market in September just as Liz Truss came into office. Earlier in the year houses on our street would go in a week or two. So maybe prepare yourself for the long hall! It will help if you price slightly lower than the EA estimate, I think we had to drop out price 2 or 3 times before we got any offers, we found that the EA didn’t really know how to price in such a changeable market.

Build costs for extensions are horrendously expensive. Only really something to consider once you’ve exhausted all other options.

They will go up more IMO.

UK bond yields are now higher than Italy, Greece and Portugal.

That's because of inflation. Buyers are demanding more reward to lend the UK goverment money because they are scared inflation will devalue the repaid money.

I think the BOE is already scared. They could go for a 0.25% base rate rise next week, but IMO it would be very risky because the UK is really starting to become an outlier now in borrowing costs. I think they will go for 0.5% to show they are serious about taming inflation. But there is some more data due before they decide I think.

Have you got space for a garden home office? That's what I'd do if I had the space, they add value and you get a bedroom back

I think extending would only buy us a little time, we'd still have to move and DC1 would need to change schools later, which I am not keen on. Plus all the upheaval of builders again- I can't do it anymore.
A house on our street sold within a week a couple of weeks ago. Very similar to ours. It sold for 210k, ours is valued at 215k, but we have an extended kitchen twice the size of the other house's kitchen.
I might ask the estate agent whether we should go with a 210 price as well :(
So many houses we like are hanging on the market since Feb, being overpriced, but the sellers are not reducing the prices!!

215k doesn’t sound unrealistic compared to the other house if your kitchen is much bigger. I would put it on at 215k but be open to offers and reduce if you’re not getting many viewings

We're considering that possibility, but the third bedroom is tiny and would not be good for DC2 long term.
There are no bigger houses in our area, so if we stay here a couple of years more, DC1 would be changing school late primary age.
It feels a bit like a no win scenario.
Actually we might take some money out of savings to cover part of the mortgage... I think we need to talk to an advisor.

Yes our kitchen is much nicer, but their driveway is nicer than ours... I have no idea! I think driveway costs less than a kitchen extension though.

It’s always hard to judge exactly what buyers will find appealing but I would personally prefer a bigger/nicer kitchen to a better driveway. Plus the EA valued yours higher. It isn’t a big difference anyway but I would go with 215k but be very observant re number of viewing’s & comments and be prepared to negotiate if necessary.

It’s not necessarily a bad time to upsize if you can sell and can afford the increased mortgage. I think in your position I would put the house on the market at a competitive price and see. If you can’t secure a sale at a price that enables you to move then look at the other options. If you are on a decent fixed rate then check that you can port that part of the mortgage then it’s only the additional borrowing that will be at the higher rate.

I pity you and everyone else in your situation, it must be horrid feeling like you can’t move unless there’s great cost. I would do a garden home office for now if you can. This is why we’re holding off buying, we would be in your situation fast and with rates as they are now as FTBs we’d end up in negative equity and on the SVR in a house too small. I’d try not to sell, you won’t get a good price for it right now and reassess in 2024

Maybe it's a good time to upsize because if house prices all dampen by x% the real amount the potential new property comes down by will be greater than the reduction in your selling price of your current place.

It's horrible uncertainty though. I'm not looking to move but my fixed term mortgage ends in March and if rates keep going up like this I can't see how I'll possibly afford the monthly repayments. Scary stuff.

Selling is a nightmare for most at the moment. My sister in law in London started to have many viewings cancelled last minute. They took it off in the end as it was pointless and exhausting. I wish you all the best but be prepare for the worst.

@ReallyShouldBeDoingSomethingElse 'Maybe it's a good time to upsize because if house prices all dampen by x% the real amount the potential new property comes down by will be greater than the reduction in your selling price of your current place.'

This is what I'm thinking. There's already lots of significant reductions going on. We might be able to get a better price overall, even if a higher mortgage.

We are in a very lucky position that our current house was a doer upper, so cost a pittance, therefore we have little left to pay off (only about £30k!).
We should be able to keep low rate on that and borrow about £150k 😮on the ridiculous rate... gulp

I'm worried if we put it off now, we will put it off forever.
Wish me luck trying to sell!

Would your DH consider renting a desk in a local hot desk place? Might be cheaper than having to move!

Since the house values are in £, im assuming you are in the UK. I thought the Bank of England meets next week?
So, are you seeing mortgage rates increase in anticipation of the BoE following the European Central Bank?

Could you split the master into two small rooms for the children and take the second bedroom?

could H rent a desk / small office somewhere?

I know others have said as well but what about a small summerhouse type office for DH?

Take the long view. There's lots that you can do with a mortgage. Stretch it over a few more years to reduce the payments, then reduce next time round or over pay later on.
I think if you focus on a) what home do you need until the kids are through school and b) what is a sensible monthly payment for you now, a decent broker will give you the options.

It might not be such a bad time to upsize provided that you can negotiate a good reduction on your onward purchase (as well as accepting a lower price for yours). If nothing is moving in your area you should be able to do this although, as you say, lots of sellers are very unrealistic.
Prices are likely to fall quite a bit further but, equally, banks are very likely to tighten lending more and some jobs will be at risk so you need to weigh these things up.

We're in Aus but our IR have increased each month (bar one) for last 11 or do months also and it's sent the market crackers.

We sold in March and completed last week. We've had to move in with my DP as there's absolutely nothing coming on the market for us to buy.

We got a decent price for ours, but the compromise is there's nothing to purchase!

Unless you absolutely have to sell, I'd sit tight until the market knows what it's doing.

We did sell to purchase a particular house which fell through and then we decided to continue with our sale anyway.

Thank you all for replies. We've got an appointment with mortgage advisor tomorrow, see what they say. We have a decent equity and DH has a stable job / can easily find similar position if anything goes wrong.
We might as well give it a go, see if we manage to sell. We could sit and wait but I don't know how many years it would take realistically. There are a few houses on the market at about 280-300 range that we could definitely afford and as much as not perfect, they would offer more space than our current house.
Very annoyed with myself that we haven't acted faster.

At that price point houses are selling well. I'd keep the £215k.

Sellers are struggling around 700-900 but then the more expensive houses at £1m+ seem to be selling. This is personal experience not conjecture.

Anything will sell if it price it realistically but you also need a realistic seller to buy from.
If your DH's job is very secure, you could wait as I expect some of these potential sellers to capitulate later on in the year. So higher interest rates working their way through lead to price falls but with a significant lag.