Rent now, wait for the crash and then buy?

adonis10

Any thoughts on this? Having had an offer accepted, I am worrying more and more about the next inevitable property market crash and as such wondering if it might be worth renting for now and playing the waiting game. Obvious downside is that one does not know when this will happen, could be 1 year, 2, 5 etc.


I do get the whole "buy a home to be a home" idea but am still petrified that the next crash could wipe 50-100k off a house I buy, and never recover thus meaning it'd be rather difficult to move again.




I am probably overthinking and being paranoid, but it is bound to happen at some point in the not too distant future.

Bluebirdman_of_Alcathays

If you have that mindset, you may as well not buy a house. Ever. A bit like the nutters over on http://www.housepricecrash.co.uk/forum/

Grenage

If there's a crash in 5 years, a house will probably still cost more than it's worth now.

As above, waiting for the 'next' crash is a sure way to disappointment.; the only way you'd win is pure dumb luck.

HouseBuyer77

Even if a crash does come how do you know when the best place is to buy? Perhaps following the EU vote we see a price slide of 10% you think 'great, time to buy'. But it's shortly followed by an even bigger drop.

Generally trying to time the market is a bad idea. The best advice is to buy somewhere you're happy with and can afford with some breathing room. Have a backup plan in case you do end up in negative equity (can you continue to afford the mortgagte when you're stuck on your bank's standard variable rate, probably around 4.5% currently, unable to remortgage?).

steeeb

"I do get the whole "buy a home to be a home" idea but am still petrified that the next crash could wipe 50-100k off a house I buy, and never recover thus meaning it'd be rather difficult to move again."

If that were to happen everyone that has bought in the last X years will be in the same position and there will likely be a massive financial crisis on our hands.

In any case, demand > supply - and unless there's some kind of mass emigration, disease or disaster it's going to always be the case. So whether there are short term 'crashes' or not, I can't see how 50-100k can be wiped off a house and never recovered.

Out,_Vile_Jelly

adonis10 wrote: »

I do get the whole "buy a home to be a home" idea but am still petrified that the next crash could wipe 50-100k off a house I buy, and never recover thus meaning it'd be rather difficult to move again.

But the next house you want to buy after the crashocalypse will also be £50-£100k cheaper so what difference will it make?

economic

you dont know when the crash will take place.

if there is a crash the next place you buy will be cheaper too.

you are just punting on prices if you decide to hold off buying.

if you think prices will fall then buy something cheap for now and then trade up when the crash comes - but again this is a punt as prices could go up more pricing you out of the more expensive place.

adonis10

Out,_Vile_Jelly wrote: »

But the next house you want to buy after the crashocalypse will also be £50-£100k cheaper so what difference will it make?

Yes, I considered this. I guess my logic is a little flawed, but I just hate the feeling that, say, £150k in the bank today could be £100k in 2 years. But cash in the bank is different to property.


I tend to do this with all big decisions; worry about every minutea regardless of whether it is logical or not.

SuzieSue

Everyone worries about house prices crashing when they have just bought - I worried about it when I bought 19 years ago.

My ex bought in 1988 just before the crash. He paid £50k and sold in 1997 for the same price.

You should only buy if you intend to stay in the property for at least 5 years and preferably longer than that.

benjus

House prices don't just spontaneously crash - it's accompanied by other economic events, such as very high interest rates, or a drastic shrinking of credit. Things that could affect your ability to get a mortgage or the terms of that mortgage. So if prices do drop significantly, you may find yourself unable to benefit from it (unless you're talking about buying outright).

adonis10

benjus wrote: »

House prices don't just spontaneously crash - it's accompanied by other economic events, such as very high interest rates, or a drastic shrinking of credit. Things that could affect your ability to get a mortgage or the terms of that mortgage. So if prices do drop significantly, you may find yourself unable to benefit from it (unless you're talking about buying outright).

Yeah, I get that. Not outright but if a 315k house became 265, for example, then certainly a 70% deposit so the additional interest would be a pain, but not the end of the world. However, as has been mentioned, when the house magically becomes worth 330 then, unless we downsize and bank the profit, any excess equity will just go towards the new house which has also risen in value, presumably by a similar %age.