First time buyer - wait out Brexit?

Hoploz

So you've been tracking prices and found there's been little difference so far. So what is going to change in the next two years? Perhaps Brexit will not have any effect until the two years is up and then there may be some change?

If therefore you've established the Brexit vote has had no influence over prices since the vote, then it must be a non-issue. So compare house prices two years ago to now. That may perhaps be a better indicator. And that trend is likely to continue.

I don't know about your area, but two years ago prices were lower here than they are now. So in two years time I expect them to be higher still.

So my view would be to buy now. Take advantage of the coming two years' likely small house price inflation. Then if there is a dip after two years and however many months then you'll be ahead of the game already.

Brexit or not, my view is always buy as soon as you can afford to do so. Long term prices rise. There are short term blips and occasional reductions in price. But if the property you buy is suitable to live in long term then it doesn't matter what prices do as long if you just stay put and keep paying it down on the monthly payments. You can ride a storm as long as you can stay put. House prices are only relevant when you find yourself in a position where you have to sell. Indeed even if you need to upsize, house price reductions can be a benefit as the one you're buying will be cheaper too, (but obvs it isn't that simple as there are fewer opportunities in a recession.)

Victor_the_Gink

dooberry wrote: »

Thanks for the quick replies.

I'm ultimately looking at this purchase as both a family home and an investment for the future. When you're planning on spending £250k going for just one or the other doesn't make much sense to me.

I've been keeping an eye on house price movements (I've found this tracker is especially useful - yopa.co.uk/homeowners-hub/brexit-house-prices/) ever since the vote, but there's not been much change thus far so I think I'm just going to hold out to see what's what.

Adrian makes a good point with his comment: "But what point in that process will you decide is the right time?". I agree - I think I'm going to have to set myself a firm date to decide what to do... likely a few months after Brexit's actually happened.

That is 2 years away. Net migration is still north of 250k, with nowhere near enough houses being built. If you ignore Crashy, who has been wrong 19 out of the last 20 years, it seems to me the only trajectory is upwards for the time being. Are you sure you want to line a LLs pockets for 2 more years?

neilio

If I were you OP, I'd do it now. The housing market and economy generally may not be hit at all, and you'll be in a position in six months, a year, or two years' time in a worse position because you can afford even less. Your deposit will not be earning anything sitting in the bank but the investment in a property would.

On the other hand, if the market does slow, then you just ride it out. You may go into negative equity but then wait a few more years and it will go up again.

Hoploz

Are you paying rent right now? How much are you chucking away rather than paying down a mortgage then?

Unless you're currently living rent free you'll be thousands down if you don't buy, won't you?

Surrey_EA

dooberry wrote: »

I've been keeping an eye on house price movements (I've found this tracker is especially useful - yopa.co.uk/homeowners-hub/brexit-house-prices/) ever since the vote, but there's not been much change thus far so I think I'm just going to hold out to see what's what.

I can't see that this tracker, which takes an average from a small group of "property experts" and takes no account of regional or property variations is particularly useful.

ScorpiondeRooftrouser

neilio wrote: »

If I were you OP, I'd do it now. The housing market and economy generally may not be hit at all, and you'll be in a position in six months, a year, or two years' time in a worse position because you can afford even less. Your deposit will not be earning anything sitting in the bank but the investment in a property would.

On the other hand, if the market does slow, then you just ride it out. You may go into negative equity but then wait a few more years and it will go up again.

But IF the market crashes (BIG if) then by waiting a year essentially he gets a much better house for the rest of his life. However the market fluctuates afterwards, all that matters is the point at which you get in. Get in now and maybe he can afford a two bed semi. Wait a year and he might be able to buy a 4 bed detached house, or a one bed flat, depending on the market. All the houses he lives in for the rest of his life will be based on the value of the one he first buys.

Gilead

I know people prior to the EU referendum were saying the same thing - I'll wait until after the vote and decide then. The referendum decision comes, no impact on house prices (but good mortgage offers out there), and they then say "i'll wait it out and see what happens". In the mean time house prices have gradually increased and they are now thinking the same way about waiting out brexit while paying out for rent.

IMHO it is a buyers market - obviously depending on region. In my area I have seen a lot more property on the market which I believe are BTL properties being offloaded.

If you are buying a home to do you for many years ahead then any small variation up or down has little bearing over the longer term.

neilio

ScorpiondeRooftrouser wrote: »

But IF the market crashes (BIG if) then by waiting a year essentially he gets a much better house for the rest of his life. However the market fluctuates afterwards, all that matters is the point at which you get in. Get in now and maybe he can afford a two bed semi. Wait a year and he might be able to buy a 4 bed detached house, or a one bed flat, depending on the market. All the houses he lives in for the rest of his life will be based on the value of the one he first buys.

Indeed!

If I were to hazard a guess today, albeit my thinking may change over the next two years depending on how Article 50 negotiations go, I would say that the government bends to the whims of the EU more than Theresa May has indicated she would, whilst appeasing the public that "control is being taken back honest guv" and we'll emerge still tied to single market conditions somehow, in order not to damage the economy.

Therefore, I don't think the housing market will crash.

But... nobody knows for sure... we're all going to have to take risks!

Greeba

For what it's worth, my partner and I got a three-year fixed term mortgage on a property that completed sale in December 2016; specifically to ride out any craziness that happens when A50 comes in to effect in March 2019 and then see what kind of sensible deal we can get later that year. This may or may not give us any security, but a 5-year deal may not have been a good measure either (e.g. interest rates haven't gone up so far).

Surrey_EA

Greeba wrote: »

For what it's worth, my partner and I got a three-year fixed term mortgage on a property that completed sale in December 2016; specifically to ride out any craziness that happens when A50 comes in to effect in March 2019 and then see what kind of sensible deal we can get later that year. This may or may not give us any security, but a 5-year deal may not have been a good measure either (e.g. interest rates haven't gone up so far).

If I were re-mortgaging today I'd be taking out a 10yr fixed, that I could port with me, if I moved home.

It's not like interest rates are going to get much lower!