Is it foolish to buy my first house before Brexit?

MagicMoneyTree81

We’re on the verge of offering on a house – as first time buyers – but the economic picture is giving me pause for thought. Many experts believe that Brexit could cut houses prices, with the most alarming predictions talking about a third in value being lost over three years.

One the one hand… I’m employed full time PAYE but about a 25% of my income is freelance work from a single client. They could withdraw this work at any moment and it would be very, very difficult to replace. I’m already 37 and don’t ideally want to leave it any longer. Our rented property is far too small for our family of four.

On the other hand… A crash could leave us in negative equity, which I don’t suppose matters if we just sit it out. We’ll be there for a few years. And were there to be a house price crash, how much harder would it be to get a mortgage? Can’t help but think banks would tighten up criteria to the nth degree and would be more cautious about freelance income in a recessionary climate.

We’re trying to drive a hard bargain, but even though houses seem to be hanging around on the market for a while, sellers are not apparently being panicked by Brexit into accepting low offers. We’ve been looking for about six weeks now and seen about 25 houses. Starting to lose the will to live.

What would you do?

Not particularly looking for opinions on whether Brexit will or won’t cause a crash – there’s plenty of expert opinion out there either way and no one can really be sure. And much depends on whether a deal is struck.

Thank you in advance!

[Deleted User]

The best time to buy a house is when you need one.

Thrugelmir

MagicMoneyTree81 wrote: »

Not particularly looking for opinions on whether Brexit will or won’t cause a crash – there’s plenty of expert opinion out there either way and no one can really be sure. And much depends on whether a deal is struck.

People will need houses whatever the outcome. Buy a home not an investment. Even the Jehovah Witnesses's have given up forecasting the end of the world.

Lungboy

MagicMoneyTree81 wrote: »

which I don’t suppose matters if we just sit it out.

Precisely.

cherryblossomzel

I'm buying my first home now. Even worse, I am a European citizen, though I've been here a very long time. Some people predict a big crash, some people predict a mild correction in prices, some say just a slow-down in price increases. No-one knows what will happen.

I'm buying because it is the right time for me, personally. I am staying very sensibly well within my budget, in a nice area that I believe has a good chance of remaining nice, and therefore reasonably popular. I intend to live there for several years at least so hopefully will ride it out.

MagicMoneyTree81

Well I hope you have no problems with staying in the country.

I was thinking the same - don't overstretch and better a house that needs work in an up and coming area than a house in a mediocre area with no prospects for growth, even if decor etc is high standard.

Thank you and good luck.

cherryblossomzel

MagicMoneyTree81 wrote: »

better a house that needs work in an up and coming area than a house in a mediocre area with no prospects for growth, even if decor etc is high standard.

Which is exactly what I'm doing. It'll take a little while to pretty it up, but I've got time.

obay

Thrugelmir wrote: »

People will need houses whatever the outcome. Buy a home not an investment. Even the Jehovah Witnesses's have given up forecasting the end of the world.

You don't know the ones around here, 1000 years to go every time they come.

middleclassbutpoor

May as well consult the crystal ball.

Do you need a home? If your income is impacted by Brexit, will it matter whether its rent or a mortgage that you struggle with? If rent is seriously cheaper than a mortgage, then Brexit shouldn't be the consideration, more why you want to pay more to live in a house?

When buying any asset, its always about time in the market rather than timing the market. If you do buy at the peak, just make sure you don't need to sell at the bottom of the market.

The great thing about a mortgage is that in X years, the asset is yours. You will be better off in my opinion that having to spend the years beyond this finding rent.

Its all about priorities but im not surprised Brexit fears are not forcing sellers to de value their property - why would someone want to buy something they themselves thought was going to go down further? As a seller myself, a buyer will need far more compelling reasons.

For example, I have seen a house online which looks way over value. It was bought for £70k less 2 years ago as a new build and other houses on that estate with bigger square footage have sold for less (£45k) in last 12 months.

If we were to go and look at the property, unless the vendor/EA could explain why the value had increased by so much, I wouldn't be prepared to offer anywhere near what they are selling for.

I would expect that my offer could be declined as its the right of the vendor to do so but I know what I believe it is worth given hard facts and would not pay more than a certain price.

If I offered £50k less than what it is being marketed for because of Brexit, I would expect the agent to probably think Im not a serious buyer and I am being a bit too cheeky..

What I am trying to say in simple terms is that you are far more likely to be successful in negotiating with good rationale and an understanding of what value represents good value - rather than based on expecting someone else to take your potential loss on an event that no body knows what the impact will be.

nkomp18

Brexit looks like will be delayed by a year or ten. Risky though it is, best not get on with it while you still can

xyz123

MagicMoneyTree81 wrote: »

We’re on the verge of offering on a house – as first time buyers – but the economic picture is giving me pause for thought. Many experts believe that Brexit could cut houses prices, with the most alarming predictions talking about a third in value being lost over three years.

One the one hand… I’m employed full time PAYE but about a 25% of my income is freelance work from a single client. They could withdraw this work at any moment and it would be very, very difficult to replace. I’m already 37 and don’t ideally want to leave it any longer. Our rented property is far too small for our family of four.

On the other hand… A crash could leave us in negative equity, which I don’t suppose matters if we just sit it out. We’ll be there for a few years. And were there to be a house price crash, how much harder would it be to get a mortgage? Can’t help but think banks would tighten up criteria to the nth degree and would be more cautious about freelance income in a recessionary climate.

We’re trying to drive a hard bargain, but even though houses seem to be hanging around on the market for a while, sellers are not apparently being panicked by Brexit into accepting low offers. We’ve been looking for about six weeks now and seen about 25 houses. Starting to lose the will to live.

What would you do?

Not particularly looking for opinions on whether Brexit will or won’t cause a crash – there’s plenty of expert opinion out there either way and no one can really be sure. And much depends on whether a deal is struck.

Thank you in advance!

1. If you were to lose free Lance income, will you still be able to afford mortgage payments?
2. If both of you are working, can you pay the mortgage if one person is our of work due to illness, pregnancy etc...