Bad time to buy a house?

p00hsticks

Davesnave said:

Maybe the early 90s thing was more regional. I remember prices where I was stagnating in the early 90s, but not falling a great deal.

I think you were lucky / unusual then. If you look at a national house price index, you;ll see that prices general fell during the first half of the decade, and didn't recover until the end. The second graph here shows the dip

https://www.economicshelp.org/blog/5568/housing/uk-house-price-affordability/

Davesnave

Possibly. I admit I was only looking at houses in my own small area at the time and nowhere near as aware of what prices were doing generally as in 2008, when I was selling. We were in a special location, but my point was that the chill wind of economics didn't shake us half as much in '93 as in 2008, when it certainly hit everyone hard. We never had a lack of potential purchasers even then, but ones who could actually sell theirs and proceed? Different story!

RelievedSheff

Davesnave said:

itchyfeet1000 said:

The last serious house price drop we had was from around 1990 to 1995 and depending where you were they lost around 25-40% of their value...

What happened to 2008/9?

Maybe the early 90s thing was more regional. I remember prices where I was stagnating in the early 90s, but not falling a great deal. Because of that, when the Crash of 2008 began, I wasn't too worried, but we were then hit with falls overall of around 15-20%. Being a buoyant place, things had returned to normal by 2013, whereas in less favoured locations the recovery has still barely happened.

Indeed. The house we bought in 2007 and sold last year had only in the last couple of years reached the price we paid for it back in 2007. House prices were slow to recover from the drop even though the area was and still is popular with first time buyers. In the last year house price rises in that area do seem to have picked up pace, but then again they also have where we now live as well.

The "crash" of 2008 didn't overly concern us. We both have stable long term (both well over 20 years) jobs that are safe so we were able to continue paying down the mortgage even though the house was for a long time in negative equity. As we didn't need to sell it wasn't a problem other then we had to live in an area we were not very keen on for a lot longer than we had anticipated.

We have no plans to move from our current property so if a similar scenario plays out again, which I find unlikely, we will just do the same again and keep paying the mortgage. This house is a long term home so it's value is largely irrelevant while ever we don't have the need/want to move on.

cybervic

I had the same dilemma 2 years ago knowing that I might have to sell and move to another place in few years time. In the end I figured I'd be losing my money in renting anyway if I didn't buy, whereas if I became a property owner then there is a chance I won't lose that money. The uncertainly of Brexit at the time make it difficult to choose a property for sure, I ended up buying a property that needed modernisation but in a great location so it's slightly safer than a property that's done-up nicely.  No one knows what is going to happen after the pandemic. Economy and society could be paralysed for several month causing financial crash in the next few years, or we might sail through safely with minimum disruption. If only future can be predicted accurately ...

p00hsticks

cybervic said:

 I had the same dilemma 2 years ago knowing that I might have to sell and move to another place in few years time. In the end I figured I'd be losing my money in renting anyway if I didn't buy, whereas if I became a property owner then there is a chance I won't lose that money.

The other side of that coin is that if you really need to move in a couple of years, if you are renting it's a simple case of giving a couple of months notice. Wheras If you have bought with a relatively small deposit, you have to a) find a buyer and b) if house prices have dropped, find a lump sum to clear any negative equity and pay selling costs for the sale to proceed.

There are plenty of stories around of people trapped in properties that they no longer wish to live in but for one reason or another can't sell.

captaindough

So, is it a bad time to buy a house?

[Deleted User]

captaindough said:

So, is it a bad time to buy a house?

It's as good as time as any.  The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

Getting_greyer

Probably wont know for 12 months or so.  Though if people put off buying then prices may drop, as long as supply is still there.  That said if demand for owning drops then demand for rental increases.  I think a lot depends on the size of your deposit. Is it big enough to weather potential value drop when you come to sell/remortgage.  Or values may drag for a while and then skyrocket. 

I'm in the same predicament but I'm more bothered about finding the right place.  This may be incredibly naive or me but then I cant predict the future

Davesnave

Lover_of_Lycra said:

captaindough said:

So, is it a bad time to buy a house?

The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

This is the point I was trying to make. Our purchasers in the  2008 recession did very well, because the property in our area fell until mid 2009, then started to recover, reaching previous high levels  5 years later. After that, prices just kept on climbing. However, had they sold within, say, 3 years, they'd have seen little if any benefit from buying low. Remember, that was a very buoyant area; elsewhere the recovery was more delayed.

We rented and bought right at the bottom in mid 2009, but of course we didn't know it was the bottom. No one does. Like the poster above, we were focused on finding the right place as a long term home, and as in all recessions, the supply had dried to a trickle, so we were lucky finding somewhere. I expected to be renting for much longer.

One difference between then and now is that interest rates were much higher: around 6% was easily achievable, so with our house money banked, we were making a good profit on renting a house in a 'better' street than the one where we'd owned. That won't be possible this time.

captaindough

Lover_of_Lycra said:

captaindough said:

So, is it a bad time to buy a house?

It's as good as time as any.  The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

I agree...if the cost of moving is 20K as previously stated by someone. 

In this case it’s costing next to nothing...solicitor fees £1000 +  surveyor £400 + a few minor bits and bobs.

Cost of rent p/m is £1000
cost of mortgage p/m is half of that. 
To say buying for a short period ie 2-3 years is “never a good idea” is a ridiculous thing to say when you have no idea of that persons circumstances.

i appreciate your opinion but I would have to disagree with your opinion on “its as good a time as any” to purchase.