Bad time to buy a house?

captaindough

Hi there,
I am in the middle of purchasing my first property...my application has been approved subject to the valuation survey. With the coronavirus crisis escalating, and general chaos this is causing, would it be a bad time to purchase a property?

 I ask this because I fear there may be a recession looming and the property market may fall drastically...I don’t want to purchase a property and then it be worth considerably less in a couple of months...is this likely?

comeandgo

It is always a risk but the time to worry about the value of your property is when you are selling.

need_an_answer

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

captaindough

comeandgo said:

It is always a risk but the time to worry about the value of your property is when you are selling.

Thanks for your reply, I see your point but, as a buyer you would surly not want to purchase a property for say 200K and it only be worth 160K a few months later due to a market crash...

I guess my question would be, would people buy a property now with the uncertainty that is currently around? Or would they wait and see what happens?

captaindough

need_an_answer said:

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

GixerKate

It depends on why you are buying the house and how long you intend to live in it.  The value will rise and fall all the time, so what if in a couple of months time it is worth 40k less, a year later it could be worth 60k more....
Personally I'm in the middle of buying a house, its one that I'm hoping to stay in for a long long time.  Its a new build so my expectation is that the value won't rise for a while but I'm buying somewhere to make my home and its also a long term investment. 

foxy-stoat

captaindough said:

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

Maybe you shouldn't be buying a property if your only going to sell it in 2 years time as buying and selling costs money, more money that you would probably make in 2 years if the property prices rise by a few percent.

captaindough

GixerKate said:

It depends on why you are buying the house and how long you intend to live in it.  The value will rise and fall all the time, so what if in a couple of months time it is worth 40k less, a year later it could be worth 60k more....
Personally I'm in the middle of buying a house, its one that I'm hoping to stay in for a long long time.  Its a new build so my expectation is that the value won't rise for a while but I'm buying somewhere to make my home and its also a long term investment. 

Thanks, this property is more short term, 2 to 3 years. If we go into a heavy recession...would we be out of it in 2 to 3 years? If not then I wouldn’t be in a position to sell....because I’d take a huge hit...I care if I lose 40K.

Is it likely to go into recession similar to that of 2008? And would people buy now with that ever increasing possibility of recession or wait, say 6 months?

p00hsticks

captaindough said:

I would be looking to sell within 2 to 3 years.

Personally I'd never buy a house if my intention was to sell it again in such a short timeframe - the hassle and costs of buying and selling just wouldn't be worth it.

With regard to your initial question, my main concern in the current climate would be how likely you are to keep your job / afford your mortgage in a recession fuelled by coronavirus.  If you'e airline cabin crew or in the hospitality business I'd be wary, if you make antibacterial hand gel, no worries!

need_an_answer

captaindough said:

need_an_answer said:

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

Things tend to go in cycles,property prices are no different
if your timeframe is set that you will sell in 2-3 years then you may end up taking a hit.

I bought property 25 years ago for example and today its worth significantly more....I also bought property 6 years ago which has increased in value...although everything is an on paper gain as I don't plan to sell.

One way to think about it is that prices if you are looking at them across the board will be relative in as much as whilst what you are selling has decreased in value,what you are potentially onward buying has also decreased in value.

Personally 2-3 years is a short time to own and make substantial if any profit from once you take into account buying and selling costs.

lees80

Nobody knows what is going to happen. If you need a house, buy one. 
I've just been made redundant. Plan now is to sell the house and use the equity to buy something smaller but with no mortgage - I've no idea what the market will do in the future, but for the present I need to do what I'm doing.