Mortgage rates rising — would you buy now or sit tight?

[BeQuaintLion]

Just wondering how others who are currently looking to buy are feeling with all the news about mortgage rates going up and potentially rising further.

Are you still going ahead, waiting it out to see if interest rates drop, or hoping house prices might come down?

I’m on the brink of buying, deposit saved up etc, and now I’m really not sure what to do. It’s taken a lot of hard work to get to this point but it feels like a particularly bad time to be taking the plunge.

I know nobody has a crystal ball and there’s
probably never a perfect time, but I keep going between wanting to get on with it and wondering whether I should hold off for a bit.

Anyone else in the same boat? What are you doing?

Hi OP, I was in a similar situation during the Liz T budget fiasco, a house sale fell through and I had to get a new mortgage at over 5% and had to fix for 10 years! I am old though and just decided to go for it. There’s always a a reason to wait, mortgages rate low but high house prices, higher rates etc.

Wasn't it Hunt that cut the CGT allowance from £12.3k to £6k, then £3k?!

I’d go for it if you can negotiate hard on something. A friend’s chain collapsed a month or so ago and everyone back on market and all having to reduce. They are potentially prepared to take 20% less than previous offer and it was not a high value house. The house they are buying will now take 11% less from their previous offer which would make it 25% down on original asking price.

Not everyone is realistic though and it will be area dependent. It isn’t as bad where we are though market has dipped.

Just spend three minutes googling 'structural issues with UK economy' rather than bang on about something you read on tabloid.

Household and government debt are two totally different things. The key thing that has made up poorer is brexit (up to 6-8% of gdp - BoE estimate).

Additionally, short election cycles mean governments only have 2-3 years to make an real structural risk reforms before thinking about bribing voters again..triple lock, NI cuts, etc.

What deposit are you using for your Carlisle example?

No "structural issues" in the EU then? The average person has barely missed a beat since Brexit, they have been spending like drunken diddies on the plastic and the Tap Tap, they start to notice when "household" debt gets difficult, i.e higher mortgage, they are not interested in government debt and economic ramblings about GDP figures that can be manipulated in various ways, humans react emotionally and mainly to their own problems, they see their own personal debt getting more expensive they cut spending, they see France burning they re-think ideas about the EU being the golden ticket to prosperity.

Agree with what you wrote, but when things like taxes increase people constantly people eventually notice. 70% of government tax revenue comes from financial services, which is an over reliance.

Similarly, erecting barriers to the closest and largest single market is stupid beyond measure. It has just meant countries are trading elsewhere.

All of this means less tax revenue to spend on infrastructure, NHS, etc.

I did say that I wasn't using any deposit so to keep the example simple. But we know that the OP has a deposit (she said so).

We just don't know her circumstances and location. So neither of us is in a position to give definitive advice.

70%?

https://www.cityoflondon.gov.uk/supporting-businesses/economic-research/research-publications/total-tax-contribution-of-uk-financial-services

I don"t think she is in Carlisle. How much deposit do you think the average buyer in Carlisle looking at 150k houses has?

I would argue that it is the EU "erecting barriers", because the UK put the brakes on their political project, I believe the EU uses economic bullying to exert their political will, the original vote was for a "common market" not a political union and single currency over multiple countries with different language and culture, those things were pushed through without proper public approval, the most sensible end game IMO would be a trading bloc between France, Germany and UK with "periphery" countries paying a small tariff to join in, the euro as a currency would have to go at that point though?

There is some truth to what you've said, but the end result is we as a nation are economically poorer, which has resulted in us having the highest tax burden since the war.

Big banks and Big Corp need to pay more then, maybe there will be an announcement in the budget?

it's irrelevant. You are missing the original point. I simply illustrated how it WAS possible to be paying more than 50% equity off from day one. Not typical but very possible.

I would crack on. Just don't over extend yourself.

Not typical at all really, so not really relevant to most buyers of 600k shoeboxes etc? How does it work out on the Help To Buy schemes?

This - best case scenario for the foreseeable.

Where does OP say she has a sale lined up that she will pull out of…random

Edited to add:

apologies, I see that the OP had edited a post where they had said they were going to pull out but then deleted it as presumably they knew they were going to get comments like yours that are absolutely on point.

What poor seller? OP has only said she's on the brink of buying.

Ok, so you do accept that you were wrong to knock the pp who claimed that (it was possible to) repay 50% equity from day one by taking out a mortgage rather than paying rent? It's entirely location and circumstance dependent. Agreed?

I just picked Carlisle because I like the look of the place and I'm familiar with their prices. I didn't cherry-pick it because it was the cheapest location. Here's a list of the cheapest locations as of March - and Carlisle isn't on the list. So again, you seem to be blinkered by your own location and unable to grasp the realities of other people living elsewhere.

People will encourage you to buy because they still subscribe to bricks and mortar being the best investment that will always go up. But it's important to remember they won't be paying your bills and potentially stuck in negative equity.

I agree, it is a huge commitment and you can’t guarantee it being a worthwhile investment buying a property, and alone. Also think that the expression ‘renting is dead money’ is old-fashioned and unhelpful. Personally I’m waiting for the budget and giving it six months whilst saving aggressively before thinking about it again - it’s not like prices are likely to go up by then, in real terms. The boom time has gone and won’t be coming back.

What size deposits are you talking?

I'm not sure why you are focused on deposits. I showed an example where someone with no deposit (assuming they could secure a 100% mortgage) could take out a 10 year mortgage and be repaying over 60% of equity from day 1.

I've given you a list of the locations of millions of people where that sort of affordable house price exists. Having a deposit wont change the maths in terms of equity percentage repayable from day 1 being greater than 50%. All that is needed is a 10 year mortgage.

Most of those people will never be concerned with your £600K examples. In fact, although I have lived all over and now live in the south, I have bought 9 homes over time (most recently 2021) and never paid more than £250K (Brighton).

This. If you have your deposit and a decent mortgage offer I’d crack on. Nothings going to change significantly in the property market for a while. If you rent for another year that’s money down the drain.

Yes op is pulling out of her purchase - very shitty.