Would you look seriously now, or wait due to potential market crash?

[Nowanextraone]

Hi
We are relocating next year to Wales.
We have sold our house and are in rented. When we move, we'll only need a small mortgage of about £50k. We have been looking at houses and seen a couple of perfect ones, thinking we might buy and get it ready during the holidays etc ready for when we move.

Anyway, we keep reading about house prices dropping and the market crashing and my husband thinks we should wait as we would be in touch a good position with no chain, cash ready etc should this happen.

We need to be in Wales for next summer.

Thank you and really looking forward to hearing opinions

Honestly, I would do what suits your life best rather than trying to game the market. Paying rent when you don’t need to is a definite cost and a £50k mortgage is pretty small.

If you’re in a good position I think it depends on how frequently the types of house you’re interested in come on the market. If infrequently I’d start now for sure. Just make sure you don’t offer too much money - I suspect most houses will be 5-10% cheaper this time next year so factor that in, especially as a chain free buyer.

If you are planning to stay in your house long term it doesn’t matter where you buy as long as it’s a good area.

i sold my house and staying with my partner to take advantage of the prices. Plan was to wait, but a brand new build were selling off plan in an area I really like in my price range. I went for it. I hope for a new build I don’t lose out, but plan to stay here for 10 years

It's very unlikely the housing market will actually crash. It might stall for a bit but people will just sit tight i imagine until it frees up again.

I would do it. At £50k mortgage you have flexibility but can I ask how much is the house you are looking to purchase?

Which part of Wales are you looking at? As different areas will have different house prices/ rises/ dips.

If I found a house that suited my needs and wants, and I could afford it, I'd buy it.
There's no guarantee prices will crash - it seems unlikely to me, but that is just one opinion of course. But any saving has to be offset against the extra rent you will be paying and the extra costs of moving again.
I think there is too much speculating on what the market will do. For me, this is about finding a home. If you live there any length of time, you won't need to worry about an extra ten or twenty thousand. As buyers who have already sold, you are in a great position anyway - you can always make a lower than asking price offer as it is.

If you find the house you want, just buy it. You can pay a mortgage instead of rent. I can't see there being much of a crash, though I am not an expert, because there are too many people looking to buy houses.

I am relocating and buying, I don’t see the point in wasting money on rent and there’s no guarantee the market will actually crash.

Ah, good, a topic we can use to discuss the question I was asked on the now deleted topic.

Yes. It was Moving Home with Charlie. I apologise for triggering Twiglet but they'll probably get over it.

In a recent video they discussed respective views with the Zoopla Index guy. He's predicting a 5% sticker price fall this year and hasn't made a prediction for next. MHwC is predicting 35% sticker price fall for the UK on average - ranging from 15% to 50% depending on area. Top to bottom over the next 2 to 3 years. Then both expect prices to track sideways for some time to come.

Who's right? Who knows? But the Zoopla guy indicated that he hadn't factored in the likelihood of recession and worsening unemployment.

Anyway Twiglet, you have strong views so propose me a charity bet, and we'll battle it out. How about this one? I predict the falls in 2023 as reported by the ONS on the LR data for England and Wales, will be at least twice what Zoopla guy is proposing. If I win you pay £5 to the charity of my choice. And vice versa.

Market downturns are often gradual and overtime rather than a sudden crash. I lived in the Netherlands for half a decade after 2008. Over that period, real estate nationally went down 20 percent, but it did take the entire 5 years. If you know now you been to move in a year I'd start looking now but don't max out your budget. If there are affordable, reliable rentals near where you're looking maybe also look at that. Yes you'll pay rent but you also won't pay mortgage interest, and you can use what would have been repayment of principal to invest in other vehicles.

I would probably invest the money you’d otherwise use on the house to cover/ contribute towards rent and hold fire for a bit.

LOL, Twiglet and I have had words about MHWC as well.

To be fair to Twiglet, earlier this week I looked at some of Charlie's very earliest videos (from around 2 years ago) and they mostly DID feel like nothing but massive sales pitches. There's no doubt the man has stuff to sell, but it seems far less prevalent in his most recent videos, and he has some interesting guests who keep saying things I never knew about the housing market.

I actually watched the Zoopla guy video twice AND WROTE NOTES, basically because I now feel me and the other half waiting 2 years to buy won't be worth another two years being miserable in our rental. My notes:

5% of mortgages taken out in the last 2 years have 90% or higher LTVs

It takes about a year for the housing market to affect growths in interest rates

Areas with houses priced 350/400k will be hit hardest with price slumps

15% of folks will remortgage this year at a higher rate

The average remortgage has 11 years left on the term

This one's a biggie for me - 50% of homeowners HAVE NO MORTGAGE

Zoopla guy thinks, as a general rule, house prices will fall by around 22% by the end of 2025

In the future he think price rises will underperform income and inflation for 3-5 years

So, I remembered back to a recent thread on here which said 'at what point would a mortgage rate be a problem for you?' and most people said 8-10%

Then, this morning I looked at annual reposesion figures; they were at their highest in 2008 at 40,000 homes

After thinking about this info, I think there's bugger all point me and the OH waiting. The sorts of houses we are looking at are mainly owned by people aged 55+, most of whom are mortgage free, and can simply afford to wait/not move. I think it will be a very, very long time before we see significant house price falls in that particular section of housing, and I certainly don't think I want to wait for a year or so past the end of 2025 to buy; I'll be climbing out of my mind with despair to get out of the rental by then.

So, instead of waiting, I'm going to look at conceding: smaller house, fewer rooms, mortgage 100-150k less than we were originally planning. That way, if negative equity comes our way, it really doesn't matter because we'll easily be able to afford the lender's SVR because we've bought vastly beyond our means.

I think house prices will fall, but I think the number of people actually leaving their homes as a result will be very small and it will be a drip feed.

It's just not worth being miserable in your home/rental/a.n. other for that period of time in order to save a few 10k, imo.

Plus we're 41 and 47 and just want to get it over and done with.

OP, with a 50k mortgage, you should just get on with it. I don't think we're going to see droves of people losing their homes; especially since affordability stress testing was a big thing for the last few years.

That's a fantastic detailed response. Good luck. If you can move and are happy with all you know then you'll be far happier in your own home than renting.

I'm one of the mortgage-free. And even those with mortgages include people with only a few years or a few £K left. They won't be sweating, mostly. I mainly care about the youngsters and FTB's who have been priced out of the market. I hope prices slide to affordable levels for them. We need them in their own homes and copulating for the nation!

Prices are set at the margin, so all those people staying put will have little to no effect on what happens next. What will affect the market are the 3 D's - Death, Debt and Divorce - the forced sellers. They will set the prices for everyone else.

This is worth considering.

I live in an area with an older population so relatively fewer people are being affected by interest rates, mortgages etc. There's not going to be a flurry of people here who over-reached on their mortgage. I imagine parts of Wales will be similar.

Thanks! It was to have a discussion with the OH who is away. Poor sod doesn't know what he's coming home to.

Hi honey. Today I am on THIS SIDE OF THE FENCE (yet again).

I really feel for FTBs, especially on average incomes with kids. They'll struggle the most to pass affordability tests, but, also, I think those are the homes most likely to start coming free over the next 2-3, hopefully at a more affordable cost for them.

One of the most important factors with house prices must surely be what monthly mortgage payments are, that's what dictates affordability in general.
With interest rates rising from .15% to 5% plus the banks spread on lending I can't see where the new demand will be coming from unless prices fall enough to bring payments down for new entrants.
The big unknown is how long rates will stay at these levels, if this is the new normal then you would think big falls must be on the cards.

I think housing must go down unless the government can engineer a way to support it (which they shouldn’t do, lower prices would be healthier).

But, if you are buying a house to live, you need to discount your opinion being wrong and, also, there is the utility of having a nice house of your own to live in.

So, no, I wouldn’t deliberately wait, but I wouldn’t stretch to buy, and I would happily look at lots of houses and put in low offers, regardless of what the estate agent tells you (for the, if you are buying, it is always a sellers’ market and vice versa).

You're wasting money renting. The dips and highs of the housing market even out long term. But I don't agree with viewing house buying as an investment; it's a necessary part of life, having a roof over your head.

I'm not sure I agree with that. There are large numbers of overleveraged amateur landlords that are just starting to realise they will be forced to sell. This might create a glut of first time buyer properties available and the result would likley be considerable falls in value.

https://uk.finance.yahoo.com/news/hunts-mortgage-rescue-deal-exclude-182150002.html

We have just bought, at what is undoubtedly, the top of the market, but staying where we are is not an option.

I am so risk advsere, last 2 houses have been practical and affordable. I can hardly believe how much we've spent on this one... But the mortgage is low and affordable for us.

Will we get the money back we paid if we sold in 5 years? Probably not. We plan to be in this home for 10+ years so hopeful by then we'll at least get our money back.

Do what will make your living situation the most secure for you. If it's waiting for a dip or jumping in now, only you can decide.

I'd sit tight. I'm more inclined to think that we're about to see a very serious correction, and you're perfectly placed to avoid losing housing equity as you've already sold and don't need to buy just yet.

(I'd agree that people still need housing, but in economics demand is defined and willingness and abilty to pay. People are just as willing to buy as ever, but I suspect we're now moving away from the period of very low interest rates, and ability to pay high prices is over. And politically there's not the will (or the resources) for fiscal measures to prop things up. The Tories may as well let the market crash now to give Labour another crisis to deal with. And by the time Labour take over, they will blame the Tories and it will be too late anyway.)

I would buy. Get a good deal especially if you don’t need much of a mortgage. Landlords can sell up. Caveat is that you expect to stay 10 years plus.

I'd buy now if it's affordable for you. I think the government will encourage lifetime mortgages (think USA Fannie Mae and Freddie Mac) which will help lower the interest rates paid by homeowners and other mortgage borrowers. The mortgages won't need to be stressed at higher rates. There would be no ERPs. It will stabilise the market and prices will go up.

I would wait. We know prices are falling and will continue to do so. Many young families overstretched during Covid, their salaries have remained the same but the mirtgage has almost doubked. Add in chikdcare and it makes a situation that isn’t sustainable. Sadly.