FTB - get on the ladder now or wait?

useless

I'm a potential FTB and am thinking about buying somewhere in the next few months with my partner.

As ever, I've been reading several scare mongering articles about interest rates and the possibility of a house price crash (or at least a slow in the rise) from as early as c. 2008.

Would anyone suggest waiting to get on the property ladder? - I fear we are buying at the absolute peak in prices?
Or would we be waiting a couple of years for a slow/crash? that might never happen?
I know these are absolutely impossible questions to answer! but would be interested to see the insuing argument...

If we could "sit it out" in our 1st property then i don't think it would be a problem if there was a 'wobble'. However, we may want the flexibility of moving in the next 1-3 years for employment reasons.

many thanks for your help.

epz_2

if you need to move in 1-3 years then mortgage solicitor and estate agent fees plus possibly stamp duty and you would wipe out any advantage to buying vs renting assuming rents arnt massivly more than your mortgage and rising very much.

think about it like this the interest portion of your mortgage is the same as rent so if you take this away from what your rent would likely be and it is substantally more than say £3-4k in fees then it may be worth the risk though i would doubt it. if you get a fall in the market is your deposit big enough to allow you to sell or remortgage should the value drop etc.

ailuro2

If you can afford to sit it out, and pay higher interest rates, then go for it. Any crash will only affect you if you sell up to relocate/expand, or are forced to sell because you can't afford the mortgage payments.

I remember way back when I was a FTB paying an endowment mortgage at 14.5%,:eek: I have always stuck to the 15% rule- could we still afford beans on toast AND pay the mortgage if interest rates rose to 15%? I do remember the news being full of people posting keys through the building society's door because they couldn't sell the house without being left with negative equity debts, but were way behind with their mortgage.

Maybe it seems old fashioned (I'm 37,btw) and I know it seems far fetched after a long spell of relatively low interest rates, but it's not a bad rule to live by,if you have the choice.

Of course it might not happen, but what if it did?

zappahey

Rather than start a new thread to "to see the insuing argument...", you could look at every second thread for about the last three years. :rolleyes:

Ad

It’s so difficult and I should know as a first time buyer in hope. There is certainly a lot of bearish news this year more so than I can ever remember. The newspapers are full of it especially the broad sheets today the times to name but a few.

I see you mentioned you may wish to move this could be an issue is prices do drop. The problem is everybody hopes for a soft landing but there is no such thing as once these things happen they tend to take on a life of their own. Just with the rampant pushing up of prices the push in the opposite direction could be just as aggressive. I feel a correction is necessary for the long-term future of the country to restore some balance back into British society.

I by the way have decided to opt out and wait and will be renting a brand new property for less than my mortgage. If things don’t change for the better I will be off to other distant shore.

missile

It makes no sense to buy if you plan to move in 1-3 years, unless you think prices will rise? The "experts" have been predicting a crash for more years than I can remember.

arthur_dent_2

If you can afford the payments now and also still afford them in a worst case scenario, then I would buy. Even if there is a crash it would be your home to do with as you please, not someone elses!

EvilScotsman

arthur_dent wrote: »

If you can afford the payments now and also still afford them in a worst case scenario, then I would buy.

I would agree with this - I don't think there will be a crash, just a slowing down of price rises; there's too much demand for a crash to happen. The longer you wait the more you'll have to pay, even if house price inflation does cool.

meanmachine_2

Or...how about the OP saves everyone's time, searches the forum under "house price crash" and spends the next 3 months reading those, rather than prompting yet another 10-page thread of pointless predictions.

That's the TIMEsaving solution.

pinkshoes

Work out how much you need to borrow, and how much the interest would be on that loan (preferably for a fixed 2 or 3 year period with current interest rates), and then if that's less than what you'd pay in rent, then it's probably worthwhile buying.

Our interest on our loan is about £790/month, and renting would have cost us £875 - £1000 per month for a suitable property, so buying was definitely worthwhile for us.

No sign of prices dropping round here, as they've run out of space to build in the areas people desperately want to live. Just check out the demand for housing in the area you intend to buy, and what plans are in place for building more, and that should give you a good idea about whether prices will stay the same or continue to rise.

granville_2

EvilScotsman wrote: »

I would agree with this - I don't think there will be a crash, just a slowing down of price rises; there's too much demand for a crash to happen. The longer you wait the more you'll have to pay, even if house price inflation does cool.

i disagree. markets are cyclical - always have been, always will be.

USA, Spain, France are all experiencing falls. Remember we have been gorging on cheap credit for a very long time. At some point it will have to be paid back.

ymmv.