First time buyer - am I doing the right thing by waiting?

[Beautyandthebeast12]

Evening all...

First time buyer here and been trying to get on the property ladder for the last 2 years. It always seems to be the wrong property or bad timing. I nearly bought a flat in 2021 but there were issues with the lease and I decided to pull out as it would have been a money pit and difficult to sell later down the line. Then came the crazy prices of 2022, bidding wars and everything going over asking. I put an offer in on a house but it went to best and final and I couldn't afford to offer any more. The beginning of this year I changed jobs and was on a temporary contract so couldn't apply for a mortgage even if I had seen a property I wanted so decided to take a break from house hunting. I've recently been put on a permanent contract in work so no longer need to worry about the job side of things, but there are literally no houses in the areas that I like at the moment and any that do come up are still being priced at 2022 prices, although they do seem to be sitting on right move for a lot longer than last year. I appreciate nobody has a crystal ball and can predict the future but I'm just curious to hear other people's thoughts, especially first time buyers. Are you holding out to see what happens? Do you think prices will come down even more next year?

I have a healthy deposit but I am buying alone so it makes it a bit harder in terms of what I can afford. I would also like to have some money left over as a safety net so I'm really not keen to spend my entire deposit.

I appreciate I could expend my search and maybe look at cheaper areas, but location is the one thing that I'm not willing to compromise on. I've lived in shitty areas before. I currently rent a nice house in a decent/quiet area and have lived here for the last 5 years so if I have to, I'd rather stay here than just buy somewhere for the sake of it.

If your mortgage payment is affordable to you, then it’s not necessarily a bad time to buy.

Thanks for your reply @DHisthethiefofjoy

Unfortunately there aren't any houses within my budget in the areas that I want at the moment anyway. I suppose what I'm asking is do people think prices will come down further next year?

In your position I'd hold off until next year at least. I'd predict a further fall in prices and as a FTB you're in a decent position.

I’d keep looking and if the right thing comes along then I’d go for it. The problem with waiting is there will be a hundred other buyers just like you waiting for the prices to drop and when they do, it’ll be carnage again…
But I’d not buy the wrong thing just for the sake of getting onto the property ladder.

I never understand this thought process, it’s an investment. Unless you’re planning to move in the foreseeable surely there is no right time to buy?

i would keep an eye on the market and try and build up a relationship with local estate agents. If someone was wanting a quick sale then as a FTB you are in a great position. You might find a house then has a complete onward chain with a very motivated seller who will accept a lower offer. Could you save more money towards your deposit by waiting?

Hi, I feel your pain OP.

I was in a very similar situation. Will not compromise on staying in a safe area and so struggled to find somewhere within budget.
I think I've struck lucky with a property that has been priced for a quick sale. Hopefully exchanging this week.

If it hadn't come along (or if this falls through) I would have waited until the spring when more properties come on the market.
Fingers crossed house prices continue to drop so that more opens up for you.

And agree with the post above me. I went to all the EAs, armed with my AIP, explained I had a solicitor and surveyor sorted and ready to go etc.

(Although they will try and show you a load of dumps hoping that you will accept any old crap if it's in budget).

I always think the run up to Xmas is a good time to buy when there are not many buyers around so less competition and you may find a more realistically priced property. Please keep us updated. Hoping something comes along sooner.

I think it's impossible to time the market perfectly. We're only making offers that would be plausible in a 5% interest rates world, which is a lot lower than most vendors are prepared to accept at the moment. But, we've spotted some places that are good value, so we're expecting to get lucky in the end. Nearly all houses at ambitious prices aren't selling.

I'd say it could be an OK time to buy but quite risky. Be careful about what you pay, and expect to lose money in the short term. Wait 9-12 months if you're worried.

its worth offering lower on houses available if its not ridiculously lower . People are having a really hard time selling right now so cheeky offers are 💯 worth a try .... They can only say NO 😉

wages now seem to be catching up with prices. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/september2023

That means fewer people unable to cope with price rises. While I expect further falls I dont think they'll fall far. But they are not going to shoot up either. So I dont think you'll lose anything by waiting but if something comes up buy it.

I've said it before and I'll say it again - in the long term, property always increases in value.

I think prices will come down further, yes, but they may not do so in your area.
I was FTB early last year (completed December) and while rates were beginning to rise there were many areas where property rarely came up - so when it did, lots of interest. Equally, areas with cash-rich buyers unaffected by rising rates.
If you're competing with downsizers who are in a better position then you, you'll lose.

What you have to decide is - for how long is it worth spending money on rent? And what happens if prices don't drop to your affordability within 1, 2, 3 years?

We couldn't afford anything in our 'naice' area so moved to the 'naice' bit of a more downmarket (shall we say) area. I'm beginning to think it wasn't a bad choice. Our house is lovely, street quiet with great neighbours, decent transport links and facilities.

Perhaps we are more susceptible to negative equity as prices might drop by more than in the naice area but it doesn't matter - the lower price allows us to overpay so there's little risk of that.

If you stretch yourself to buy and find for some reason you can't make the payments there's very little wiggle room. You'll be stung when your fixed rate expires.. you won't get much better if you've not made enough headway to get a better LTV.

People used to get away with it because of house price rises but we're now in the opposite situation. FTB are at highest risk of negative equity.

If something comes on the market that you like and you can get a mortgage to cover it I would go for it. I have bought and sold about ten properties over the years and they have always always gone up in value eventually, even when I bought at a 2007 peak before they went significantly south. Also as others have said it's your home. Yes you might be able to save a few K by waiting a few months but in the mean time you will be paying rent. And also it might well not go down that few K either. If the right property comes on and you can stretch to it you should go for it as soon as possible. I bought a new family home a few months ago. It was at a higher price than it would have been pre-pandemic. It might go a bit lower in the next couple of years, who knows. But it is a house I really wanted and I am ever so happy to be in it.

I'm also a first time buyer. Like you, I've been looking for the past 2 years, much of it on & off as I sometimes just had to take a break, as I found it so disheartening.

My county in Wales is going to be one of the worst affected by this slump I'd say. Not only are we experiencing a general market fall, but we also have things like Section 4 and higher council taxes for holiday home owners which will dampen demand further.

Now this may seem like good news, and it is if prices fall further, but it also will negatively affect who is then interested in buying my house if I need to sell.

Like you, I'm not seeing people willing to sell their houses for less. I've seen a bit of it, but people seem intent on clinging onto the 2022 dream which has now faded. A friend told me that her estate agent told her that this year they've seen demand slow earlier on in the year in August, rather than October. The amount of houses on the market seems to be growing because many are not willing to sell their house at a pre-pandemic boom price, so they're just not selling as a result.

I'm not intending to delay my search. I definitely would if I were in my 20s, but now I'm in my 30s I want to buy sooner rather than later. However, that doesn't mean I'm willing to give the sometimes silly prices that some sellers are asking for.

Yes.....key word being 'longterm' there....and depending on how bad it gets, it can be really, REALLY longterm. It's taken until now for some houses that were bought in 2007 - 2008 to recover their value and put 20k extra on.

Anyone who thinks they might have a change in location or job within the next two years should be extremely cautious in the current market. Otherwise, if they put a foot wrong at the moment, they could be trapped in the same house for years, unless they want to lose their deposit or get into negative equity.

hi, as some pp have stated above FTB are at risk of negative equity right now and for many it's worth the wait as houses prices are expected to drop significantly more. 2021 and 2022 prices were over-inflated that's for sure. Personally, I think sellers will see a poor year in 2024.

There's a whole thread for Buyers below in case you find some answers there:

It all depends on the house. Offering too low can certainly backfire and trigger and automatic 'NO'! However, a buyer should be looking at the general local market, not whatever the seller wants to sell for. If a house is listed as 200k, but actually, it seems to be overpriced as similar houses currently go for around 150k, then putting in an offer for 150k would still be acceptable in my view. That's a lot, but it's only a lot because it's been overvalued in the first place.

Something else to add...

I've read/started similar threads on various forums/sites. Posters will confidently give you financial/property advice saying one thing and another will tell you categorically the opposite.

Anyone that predicts what the housing market will look like in 2 years, 1 year, six months, next week are just guessing.

'I suppose what I'm asking is do people think prices will come down further next year?'

Yes, house prices are widely predicted to fall more in 2024. Personally, I think they have much further to go in the next 1-2 (or maybe more) years.
However, you also need to consider your job security, how generally credit worthy you are, your rental situation, etc. If you can negotiate a good price on something you really like, it may be worth considering buying sooner.

If you see buying a home as an investment, then of course it makes sense to buy lower (and sell higher). You don't buy shares at their peak when forecasts for growth are negative for the company if you want to make an investment.

Thanks @iovebread

I've put in a safe offer recently, trying to take into account how low the value will drop to in 2024 and other factors which will negatively affect house prices and future interest in my area. I'm taking a risk buying at all at the moment, and I've been told by more than one neighbour that the house I want has received hardly any interest. I wouldn't be at all surprised if I'm the first offer they've received.

I'm a first time buyer and can move very quickly. Totally clean credit history and the mortgage in principle's already been approved recently.

My offer was refused. It's been on sale for months.

@IhateJan22 You can never really predict what's going to happen. Redundancy and job insecurity is still present in the psyche of many millennials, if not their current reality. I've faced redundancy type situations several times. Many people change jobs every 2 years because unfortunately, many companies don't respect or adequately reward employees who stay for a lot longer than that. They just take you for granted, over work you whilst they pay newer staff more than experienced people.

People split up, get divorced, or need to move be because of something else in their neighbourhood, like new horrible neighbours.

One should account for these possibilities.