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.

My point of view is simple, cheap debt since the early 2000s caused a massive property price bubble, higher rates are going to cause that bubble to pop, and there will be a lot of misery if you have loads of debt, the conditions (zero rates, QE etc.) since 2008 are nothing like the time periods you are talking about because this type of monetary policy experiment has never happened before! (we are in the "unwinding" part of the experiment now which should be interesting) The idea that people should have two or three BTL mortgages on top of their main home is also a relatively recent idea, but the main idea was to get as much "secured" debt out into the economy as possible, the experiment has failed and is socially damaging. Comparing property returns from previous years/decades doesnt work because the monthly debt payments now make it impossible to repeat those gains, and the only reason house prices are so high now is due to super cheap debt and low monthly payments! Also you cant just say "It has more than doubled" you have to test that in a market for the price to be real, but even if it has, people buying now wont be repeating that type of property price gain, they will be experiencing property price losses, the other side of the shiny coin.

Prices are high due to demand. Interest rates are only part of the picture.

The UK isn't building nearly enough in terms of housing.

Sounds like you missed your chance to buy years ago and you're sore about it.

Interest rates are the only thing that counts regarding price, there is plenty of housing stock, that is the reason developers are seeing orders falling away and they are not building more, and that is before the mythical BTL sell-off ever gets started or AirBnB starts flooding the private rental market in a recession, the Truss budget showed us what happens when mortgage debt goes up in price.......demand fell 44%! The only solution to the UK`s housing problems is a price crash.

I also think they are building the wrong things. High rise apartment blocks or 3/4 bed homes priced at (in my area) way over what a ftb would usually be able to afford and want to buy. Where are all the 2 bed houses with a garden? I'm a fairly average ftb and there's nothing new build that would work for me at all..

With low rates and schemes like Help To Borrow people could just about stretch to buy these things (and line the developers pockets) many who did so will be in a financial mess now probably.

I’m of the opinion that prices will not be coming down too significantly. It might be reduced slightly but not much. Reason for saying that is-

• For Scotland anyway: prices tend to be at least home report prices. Even if listing is “reduced” in reality it isn’t. I made that mistake of believing the ‘reduced’ price several times. Rejected my offers instantly.

• Edinburgh especially, lots of rich cash buyers locally and from overseas either as home, second home, rental or air b&b. Desirable locations are, well, desirable and will attract a lot of offers. There are new builds in several area in Edinburgh that I went to see and 100% not desirable location. I would definitely not buy.

Therefore I am honestly not convinced it will come down a lot. I only know Edinburgh and I would say it’s just a bit sluggish but I’m sure there will be an influx of those waiting once the market changes.

open to thoughts. These are just my thoughts from observing and keeping up with current market conditions.

Are you deliberately misnaming Help to Buy?

It does appear to have been ill thought out (or was it deliberate?). You see threads about it on here all the time where people are starting to panic about repaying it.

I saw an interesting article about this - can't find it anymore but the gist is that, building aside, a lot of FTB homes have disappeared due to extending. There are quite a few streets of what used to be 2 bed bungalows / terrace houses around here. Most have been extended to within in an inch of their life, so they're all 3/4 bed.

In the near future FTB will probably have no choice but to buy a flat, then upsize to a house...

Yep very true. Ideally you could buy a small flat in your late 20s/early thirties, keep that for 10 years and then step up to a house. Unfortunately I'm 43 with a pile of pets and a love of gardening.

No, I am accurately describing it`s purpose. Unfortunately it is too late for people to wake up to what a scam it is once they are signed up. The more informed forums on the internet (HPC for example) were calling this nonsense out years ago.

In the near future FTB will be buying cheap property at the auction house.

In the near future FTB will probably have no choice but to buy a flat, then upsize to a house...

This is traditionally how 'getting on the ladder' worked; at least in my experience and lots of people I know.

Yep - no wonder FTBs are struggling if they are trying to buy their forever homes immediately! I’m 45 and I’m not in my forever home yet!

(and yes I realise FTB are older now and that most FTBs do buy flats, obviously I am being flippant here)

It depends where you're from. Very few FTB where I'm from (and where I live now) buy flats as the first rung on the ladder. Small houses, yes. Flats, no.

Then who is buying the flats?

Downsizers, retired people, BTL landlords. The latter mainly, I think.

I've never known anyone in either town buy a flat as a FTB. Sorry that doesn't appear to be convenient!

Where my brother lives in the north east, he has never lived in a flat nor his 2 adult kids.
They all started off with 3 bedroom houses.
In the south east where I am my husband and I both started off with studio flats and a single daughter with a 1 bedroom flat.

yes it's very area dependent.

I started off in a 1 bed flat in London and so, many years later, did my daughter.