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?

You are stretching a point to try and make a point, people with access to 100% mortgages are generally not looking to buy in Middlesbrough, IMO, the houses in the towns you list should be average price 80k or less, not 140k+ or whatever, again IMO, you might as well just say that someone with a "good job" should save up and buy a 50k flat above a kebab shop for cash, because in reality people are buying/borrowing and stretching themselves in areas where there are jobs and people aspire to live, that is what my comment was aimed at. Sales volumes and mortgage approvals tell us that it was all about access to cheap credit, not about people who were quite well off to start with and could secure prime mortgage deals.

No point is being stretched. I just illustrated why it was wrong of you to scoff at the pp who said that it was possible to pay off 50% equity taking out a mortgage rather than paying rent. I provided such an example. You seem reluctant to accept this point.

You may accidentally be slighting all the good people of Middlesborough, et al, who are nurses, doctors, teachers, dentist, council workers, etc. They have no general aspiration to live elsewhere. They can comfortably afford the scenario laid out for you prior.

Yes, we both agree that we'd like prices to be lower. But you can wish for that and carry on renting, or just get on with your life where you have chosen to live.

I stand by my point, the average mortgage user is not getting prime deals, they are not buying a room and a toilet above a fish and chip shop, and they are not lining up to buy in the towns you mentioned, great as these places and people may be, and houses are still too expensive, the average house in the towns you mentioned should be 40 or 50k.

https://www.bbc.co.uk/news/articles/c8rxlvvvdgmo

Two-bedroom terraced houses with no gardens in a very ordinary and quite rough part of the popular city in the north my partner lives in sell for £220 - £250k. Damn right houses are still too expensive @KeepPumping

Are they actually selling now that rates have gone up a bit though?

Yes, still selling but at a reducing rate (although nothing like zero because not everyone needs a mortgage). See UK Property Market Stats Show on YT.

How on earth is it shitty.
The economy is in the toilet and getting worse.
No one wants to be the “Greatest Fool” and buy at the top of the market and risk immediate negative equity, losing tens of thousands that they have spent years saving, when prices are coming down.

Is that nationwide figures.
@KeepPumping I was rather impressed by the graphic you did the other day showing sales over a period since about the late 1990’s to date.
I can’t remember the website you quoted.
It was rather shocking the drop in active sales and shows the slowdown.

England and Wales. It would be reasonable to assume that the market is generally tougher in south and easier in the north. Transaction volumes only really significantly shifted at the GFC in 2008 from (very roughly) 100K pre to 60K post.

Roughly half do (most of them get reduced) because it’s a popular area for couples and couples with one child, mainly because of the proximity to the city centre and compared to some other areas of the city, almost a quarter of a million pounds for a tiny house in a rather shit area where even the co-op aren’t interested in bringing a branch to is seen as ‘cheap’.

I follow that yes.

Probably "Plumplot", I like their graphs.

Yes, just shows the level of complete madness regarding property we have reached, hopefully the bond market is going to start chopping wood soon.

Exactly, sellers thinking they will milk some mug buyer for a juicy profit on a basic house need to give their heads a strong wobble and smell the coffee beans.

I understand your wobble but now is quite a good time to buy and definitely a buyers market, there is so much on the market to choose from.

I bought in April and got a rate just below 5%. However I used the market conditions as a bargaining tool and got a v good price reduction. Hapoy with purchase and paying less on mortgage than I was on rent towards my OWN asset. Go for it is my advice.

This. We bought for the first time in 2011 when everything was in the doldrums and the good whackjobs on HPC were still convinced that the market had even further to fall. But it worked for our family situation at the time, we built up a stash of equity and have since moved to a bigger house with a financial commitment we are comfortable with.

Housing isn’t just or only an investment, you’ve got to pay for someplace to live.

There were folks on HPC who were too scared to commit to a home purchase and are now looking at prices two or three times greater than they could have purchased for then. They just got it completely wrong. We hear the same noises now. I'm all for prices falling but I'm more for getting on with your life.

Just one word of caution. NEVER consider your home as a (financial) investment. It's just a place to affordably live with your family. This investment kind of thinking is what has driven much of the current crisis with amatuer landlords making out like bandits off the back of loose credit and minimal regulation. Housing is a terrible investment. It's illiquid and not diversified.

Yes, I’m very much of the same mind. And that’s why it drives me crackers when people come and ask “should I fix for 2 or 5 years?” and reduce it to whether rates might go up or down. That’s crystal ball territory - people should be thinking whether or not they might need to move again, whether they have nursery bills or childcare that will increase, whether their jobs are secure. That’s what should influence their choice of fix, not whether rates might move (hint: they almost certainly will).

Interested to see the graphic....

People saying they were scared to buy years ago but are glad they did - we are in totally different times now. The threat coming from AI, global conflicts, higher interest rates, prices falling in real terms.

Also, if times get hard it's not like you get much help from the government.

@KeepPumping posted this in another thread I think. This is the chart. Ignore 2026. It's not complete and housing data is lagged. The real impact occured after the 2008 GFC (watch The Big Short if you get a chance - great film!)

The other point is that I’m finding it so very much nicer to live in my own (well mostly the lender’s) place…. no quarterly inspections, can decorate and make it my own etc.
imo it’s an absolute scandal that young people in particular might never be able to afford to escape renting. It really can be a miserable experience.

There's always something though - Sept 11, GFC, Brexit, COVID, Trump...

See the post by xvgn below.

Yes, but those things were part of or the cause of the period of falling and then very very low rates, and during Covid the government were giving people free money, higher interest rates, higher cost of borrowing, a government that is being forced to address welfare spending are a massive sea change for a whole generation of people.