How do you know when to buy?! Worried about a crash

Louise1234

My partner and I are saving for a deposit as we currently spend £15k a year renting, but house prices just keep going up and up.

We are in Hertfordshire so always going to be expensive but a 4 bed terraced went for £290k in April 2014 and is now back up for sale for OIEO £400K!!! For the same house in 2 years absolutely no changes to it at all.

We are toying with the idea of buying something smaller and moving in a few years so we don't get priced out completely but what if the market crashes? Surely it can't continue the way it is?

My mum almost lost her first house in the 1988 crash when interest rates shot up and I don't want the same to happen to us.

How likely is a crash?

Realistically to get a decent sized house - 3 bed semi or 4 bed terraced (we have 2 children) we will need to save until summer next year - should we wait and hope prices don't rise dramatically like they are? Or buy a small maisonette that we know we will want to move out of Christmas time?

Thank you if you have got this far :j

AnotherJoe

Louise1234 wrote: »

Or buy a small maisonette that we know we will want to move out of Christmas time?

No the costs would wipe out any gains.

As for the rest, you are mixing up two things, a house price crash and an interest rate rise. Each can happen independent of the other. Neither may happen. No one knows.

mildredalien

I wouldn't buy anything you wouldn't be happy living in for a good few years. Who knows what will happen, we're buying now because we want a home of our own, can comfortably afford it, and have found a place we'll be happy in for some time.

frugalsmurf

There's no way of knowing. People take educated guesses but no one really knows.

My advice (as someone who has moved a lot!) Is don't move a lot.

Buy something which you can stay in at least a few years as a home. That way you aren't anxiously waiting for a rise/crash. The costs of moving wouldn't be worth the investment.

Can you look out of area or are prices high everywhere near you?

Don't over extend yourself(been there, done that and got a ccj to show for it)

amnblog

Smurf is right.

The easiest and most definite way to secure your home is to pay your mortgage off.

silvercar

Hertfordshire house prices tend to be held up by the prices in North London. Having watched house prices in the area for almost 30 years, the time to worry is when the prices in North London are cheaper and then the Hertfordshire prices stagnate until they are overtaken again. Very true in the south part of the county and a filtering effect to the remainder.

I can't comment on the particular house you are looking at obviously, but generally the above has proved true.

System

If you invest in stocks and shares isa or property funds through an isa you can keep up with house prices without pressure

System

Personally I'd buy a cheaper place I could afford just to escape renting, then get yourself stronger and ride the market

People have unrealistic expectations and want it all straight away

silvercar

MatthewAinsworth wrote: »

Personally I'd buy a cheaper place I could afford just to escape renting, then get yourself stronger and ride the market

People have unrealistic expectations and want it all straight away

The problem in a rising market is the gap to move to a bigger home widens not shrinks.

benson1980

With the price rise on the terrace, apologies if I'm pointing out the obvious to you but you do know that on rightmove if you go into sold price history, the house details will automatically have the most recent photos i.e for the current listing? Even if its listed for rent it will automatically update the photos. I find this really annoying personally as you'd expect to see what it was like at time of the purchase. Zoopla is much better in this respect as a lot of the time you can track back to previous listing details.

System

Silver car - true but it depends how long they'd be renting for... a cheaper property will help ride the market better than rent, any spare cash could go into stocks and shares isa perhaps rather than overpay mortgage to keep up