Keep going or stay put?

[Ducksinwater]

We have been searching for our dream home for 2 years. We live in a rural area that was very popular during lockdown so property prices have skyrocketed. Locals could no longer afford to buy homes in the area. That said, things have now slowed down, the houses with a higher price point are on the market for a long time.

We viewed a lovely cottage with lots of character but it was high risk for surface water so we have discounted that. The EA has sent 3 properties across for us to view and none of them have the cottage charm but all tick most boxes in terms of our requirements. They have all been on the market for 3-12 months and in my view, are overpriced for the current climate. They will all need total renovation. One sold and came back on the market within a few weeks, one has had no offers and one has had low ball offers.

Being told the above has made me question whether now is the right time. We live in a small house and want to start a family soon. Moving now makes sense from a personal perspective but I do wonder whether it’s a poor financial decision. House hunting has been exhausting so maybe I just need some perspective!

Are you saying you bought when prices were high and so are likely to be in negative equity of your sell now?

or are you saying that you won’t get as much as you want/need for your current property?

if the later then what you are buying will also be in the same situation and you can also look at bigger/more expensive and put in a low offer. Hopefully get more for your pound than if the market was strong.

Do you have a property to sell?

Some people are only just catching up with the fact that the property market is no longer 2022/23.

I suppose it depends how much you want to move and how much renovation you’re prepared to do.

Neither - sorry, I’ve clearly waffled on and not explained myself properly.

We are mortgage-free in our current home and already have a buyer lined up at the asking price. The challenge is that the next step up for us represents a significant jump in price, and the properties we’re considering all need renovation.

Our concern is that if we buy at the asking price and then spend a fortune on renovating, there’s a good chance the property will be worth less than what we have spent on it for some time. At that point, we’d also be in a price bracket where selling could be more difficult.

In reality, that probably shouldn’t matter because we’re planning to stay there for the next 20–30 years. However, I’m naturally quite risk-averse, so I’m uncomfortable with the idea of being in negative equity or having a property that could be difficult to sell if our circumstances changed unexpectedly.

I understand what you are saying about being risk averse. But if you buy a property in a good location and renovate it in a 'reasonable way' then you will always have a good asset. If your circumstances changed there would probably be more than 'one way out'.
But, this is to be your home, buy on that basis if you can. Who knows the future.

Instead of thinking in financial terms why not consider the other factors. Will a rural home make you happy? Can you envisage raising a family there? Fo you have friends and family close by? Dies being near a corner shop/transport/good schools etc matter. Would you rather renovate before having a family? Are you happy with mortgage repayments?

No one really knows what might happen financially, but you will have a good idea if moving is right for you.

This is probably a better way of evaluating things. We currently live in the area so it’s close to family, work etc and wouldn’t be any different to where we live now in terms of area, we just need more space.

I would definitely prefer to renovate before having a baby. It’s bloody stressful, expensive and disruptive. We have renovated the house we live in and we are set to make very good profit on this house but that is as a result of actual blood, sweat and tears, and many sacrificed weekends! I don’t want to do that with children.

In terms of the mortgage, that will be an adjustment as we are mortgage free but that would be the case regardless of which house we choose.

Surely if the houses have been on the market for a while you would offer below asking price. Then whatever you spend to renovate on top? Yes you may have a small amount of negative equity but if it’s your ‘forever home’ you would ride that out over time.

I get the impression that people are hanging on rather than just letting their properties go for under asking price. There are houses in the area that have been on the market for 2 years!