Would we be mad to buy?

Engelbert

I am sure house prices have further to fall, hence my question. Its a personal decision so I've given quite a lot of information...

We earn 35K each have a £35k deposit and have found a three bed semi, OK area, near parents & the station which we think we could get for £165k. It needs stuff doingbut the plan is to live there and save up and do it bit by bit as we can afford. Its liveable. Mortgage payments are about the same or slighly more than our rent on a 2 bedroom flat.

The reason we are buying when we think prices will fall further is that we want to start a family and get settled. We could wait, but hopefully once we've had kids I'd work part time, or not at all, so although house prices would have fallen, we wouldn't be able to borrow as much. It seems to make sense to buy now, a house we can live in for 5-10 years with any luck, and look on it as a home.

Are there any factors I've missed? I'm a typical FTB worrier, and this is a really big decision for us. We've been saving for years! Its been so frustrating not being able to settle and TBH we've been putting off stuff as we couldn't afford a house which is just daft.

Thank-you!

cattie

I'm of the opinion that if you're buying a home rather than wishing to 'invest' in a house, then anytime is the right time to buy.

If you're intending to settle somewhere long term, then there are going to be changes in the housing market and If the market does drop further, it doesn't affect people living in their houses as homes. The house is providing a safe & secure roof over their heads & the money they would have spent on rent is going towards the mortgage.

If the market has dropped at any future point when you come to sell, then it's pretty relative, as other properties will also have dropped in value, making everything a pretty level playing field as far as buying & selling goes.

Mini_Bear

As cattie says you are not lookin at buyin a house as an investment.
I think between the pair of you you could easily afford that property. You seem very sensible.
My advise would be to make an offer below your top price and see how it goes, in the mean time save save save - every thousand used as a deposit will make a difference!
Good luck!

penguine

If you're planning to live there for a long time and have a family, I would take a good look at local schools to be sure you're happy with them.

Also make sure you can avoid your mortgage payments should interest rates rise (as they are likely to at some point).

Engelbert

Thank-you! Thats more or less what we were thinking - good to know we've not lost the plot.

Local schools are OK to good, we're in the catchment area of a couple (including my old schools!).

The worry is interest rates rising, but we would be looking to fix for as long as we could...

Dinah93

Do bear in mind that interest rates are at a historic low, the 6% ones we had a couple of years ago were seen as low also, you need to be sure you could still afford the mortgage if you were to come off your very low fixed onto a 8 or 10% rate.