Wait and see strategy before getting on the property ladder?

Ransom_Dry_Elk

House prices seem to have been rising at a fast rate for some months now and this has caused some alarm with it now looking like it's going into a slowdown.

I'm currently renting a flat in Manchester and would like to get a mortgage after this as a first time buyer. The question is should I wait it out in case there is a correction in the housing market? My current rental agreement is up in November so I have until then to decide whether I want to stay for another 12 months or take the plunge.

Do people around here think the housing market is heading for a correction and if so do you think it's likely in the near future?

Thrugelmir

The right time to buy a property is when it's right for you. Don't get caught up in the hype. Prices around here haven't reached the peaks of 2007 yet.

ELToro

I think I bought my 1st house a month prior ro the crash in 2007. Prices near me are higher now than 2007, we just sold our house for a profit which was a shock. But I do agree do it whens it best for you. If you can afford it and the potential increases in rates I would do it.

PasturesNew

Buy when it's right for you - which might not be purely price based. I've just bought simply to be able to know I live somewhere, I belong, I can finally unpack my boxes and "live" without fearing a LL inspection or a rent hike or a S21.

There are many reasons to buy ..... but for the right reasons, not because you're trying to play some "bigger game".

Idiophreak

Personally, I can't see a significant correction in the next couple of years. Interest rates will stay pretty low for the next couple of years to try and keep things steady. Government schemes etc are doing a good job of increasing demand for houses. Still more people needing houses each year than there are houses being built...and much of the country is still to match 2007 prices - I'd anticipate prices going higher this time before a correction.

Given that I see the next correction as being a ways off still, I've just jumped early to buy my next house - local prices are increasing at roughly 10%pa - if I waited another year, I'd simply not be able to afford the house I'm buying now and I don't want to have to stay put until the next correction.

This may mean that I pay more now than I could do ultimately - but I'll take a few years off the mortgage in the meantime - and enjoy living in the house I want for a few more years, too.

ETA: I re-read this and realised I was opening myself up to the classic "if you can't afford 10% more, what are you going to do when interest rates...." line. Just for clarity, I *could* afford to pay 10% more in a year....but would be much less comfortable and would be at much more risk in the event of rate rises.

ACG

I cant see it ending anytime soon.

I am busier now than I have ever been. The demand has always been there, the only thing that was lacking was the money from lenders. Now that has been freed up again the market is back on the up.

Have a look at how many new builds are going up in manchester, apart from the ones around eastlands there is nothing unless you go out a bit - for example Bolton way.

Demand is high, there are not enough new builds - I cant see house prices going anywhere but up for the next few years.

Thrugelmir

Adding to my earlier comment. A property may only come on the market every so often. The previous owner of mine lived in the house for over forty years. So it's much about being the right property for you rather than just a property.

amnblog

Another mystic meg thread.

marsman802

Yup - there is no more point in debating this than in trying to guess interest rates in the future.

Nobody thought we'd still be at 0.5% now - I still think we'll be at 0.5% for at least another year but you never know...

At the end of the day buying property is an investment and if everything was just going to go up everyone would buy everything in sight but people (and lenders) and more cautious these days.

If you wait, you may make if unafforable to buy down the line.
If you buy, you may find yourself in negative equity.

PasturesNew puts it perfectly. Do the right thing for your situation.

macca1974

I agree with the comments above. If you want to buy, can afford it and it is the right time to set down roots then do it. Waiting for the market to fall could mean that you will be waiting for a very long time and it could make a house that you might be able to buy today unaffordable. Trying to time the market is (in my opinion) impossible.

If prices do fall after you've brought then it doesn't really matter unless you want / need to sell. If prices go up after you have brought, it doesn't really matter unless you want to sell (and everything else will have gone up as well).

And this is from somebody who still in has the rather dubious honour of having spent the most on a 3 bed semi on my road ever according to Zoopla (2006)!

Thrugelmir

marsman802 wrote: »

At the end of the day buying property is an investment

First and foremost it's a home. Once paid for gives people enormous degree of security. As it removes the need to earn large sums.

Investment is speculation. Every market moves up and down in cycles. Like the Dot Com boom people move in herds and ignore the obvious even though it's plainly in view. Then wonder why and jump on the next train far too late. .