Should we pull out? Buying our first place and Corona Virus concerns

Jonny363737

Myself and my partner are currently proceeding on a  house in the UK (first time buyers)  Purchase price is 243000. We have received draft contracts and the solicitors are no sale no fee. We're currently living in rented paying 825 pcm. 

Naturally we're very concerned re the potential (and seemingly probable) fall in house prices. I get noone knows for sure but it seems to me there's a high chance of a financial crisis and a big drop in property value.

Can anyone help me shed some light on probable outcomes of what's happening in the world atm? Do we have any relastic idea on how much prices are likely to drop? Different sources are naturally saying very different things. Also how long is the market likely to take to recover, if we end up staying put for 4 years that's almost 40k in rent gone.
At the moment I'm leaning toward playing a safer game and pulling it out and sitting it out for a while. Having said that we waited the second half of last year for the outcome of brexit and look how that turned out. Another option is to amend our offer taking into account the current situation but that is another gamble seeing as it's likely to get worse before it gets better. 

Thank you very much in advance for any opinions and advice. It will be truly appreciated and hopefully will help make myself and my partner make the correct choice. 

[Deleted User]

How can any stranger on here predict if/how much house prices will fall because of something that's never happened before (coronavirus) with government interventions (interest rate fall so interest rate is lower than its been for god knows how long) to try and stave off economic recession that haven't really happened before.  You have noted 'expert' opinions differ.  How can we have any sensible reliable input.

Perhaps you need to find someone with a crystal ball lol.

I'm sorry, not trying to be rude, rather trying to help you to realise no one can provide the predictions you require with any reliability.  Yours is not the only thread in this vein on here.  Read them. 

You will have to decide based on how long you intend to live in the house/job stability/rent you won't be paying/life aims as to whether its worth taking risks re any possible fall in price.  House prices rising or falling in the near future shouldn't be the only indicator as to what you 'should' do.

Sebo027

Jonny,
A very similar question has been asked recently, check out this thread:
https://forums.moneysavingexpert.com/discussion/6117489/should-i-be-buying-now#latest

peppapig14

Jonny363737 said:

Myself and my partner are currently proceeding on a  house in the UK (first time buyers)  Purchase price is 243000. We have received draft contracts and the solicitors are no sale no fee. We're currently living in rented paying 825 pcm. 

Naturally we're very concerned re the potential (and seemingly probable) fall in house prices. I get noone knows for sure but it seems to me there's a high chance of a financial crisis and a big drop in property value.

Can anyone help me shed some light on probable outcomes of what's happening in the world atm? Do we have any relastic idea on how much prices are likely to drop? Different sources are naturally saying very different things. Also how long is the market likely to take to recover, if we end up staying put for 4 years that's almost 40k in rent gone.
At the moment I'm leaning toward playing a safer game and pulling it out and sitting it out for a while. Having said that we waited the second half of last year for the outcome of brexit and look how that turned out. Another option is to amend our offer taking into account the current situation but that is another gamble seeing as it's likely to get worse before it gets better. 

Thank you very much in advance for any opinions and advice. It will be truly appreciated and hopefully will help make myself and my partner make the correct choice. 

we are in a similar position, due to exchange in a week. we have been looking a long time, and know we are paying a premium for the house compared to what it would be when house prices drop.
however, we don't want to wait for prices to drop as the lending criteria couod change, we might not have a job then, there will be many buyers waiting for a crash so demand will be high and we could be waiting a long time to find somewhere.

[Deleted User]

Ive pulled out on my purchase 

ConfusedSeller

You need somewhere to live. Even if it drops in price short term you are still paying less than you would be renting, and as long as you're not looking at switching it round quickly house prices will recover. If it's a house you want to live in and will improve your life, buy it still. If you're buying it because it's an ok option for now and you're feeling like you "should" be on the housing ladder, then maybe hold off. 

JessJ23425

Densol said:

Ive pulled out on my purchase 

Just going to add a little more info from this chap - he's pulled out of his BTL INVESTMENT purchase!! Very different situation obviously.

If it's somewhere you plan to stay for years to come and importantly you are not expecting a change in your circumstances employment wise, "go for it" has been the main advice on the forum.

MovingForwards

JessJ23425 said:

Densol said:

Ive pulled out on my purchase 

Just going to add a little more info from this chap - he's pulled out of his BTL INVESTMENT purchase!! Very different situation obviously.

If it's somewhere you plan to stay for years to come and importantly you are not expecting a change in your circumstances employment wise, "go for it" has been the main advice on the forum.

Not as dramatic for him/her to say it was a BTL though was it, as it gives perspective and not the panic s/he is trying to spread!

Jono987

We are about to exchange and arent pulling out
We are FTB, im only a couple years away from being 30. Both stable jobs, putting 20% deposit down and aim to start a family there. Not really worried what happens to the house prices, the mortgage will be £50 cheaper than our rent And we have had to jump through a lot of hoops to get the mortgage and were lucky to be offered one at all!

snowqueen555

My personal opinion is to err on the safe side for what is likely one of the biggest decision you will make up until now. It's not even a question about the value of the house, but more about the wider economy. It is your choice at the end of the day, but from what I have been seeing, there will be a decline in people wanting to buy houses, and while i don't think prices will drop a huge amount, you will have no trouble buying something a little later on.

panik27

I pulled out of my purchase - only since I live at home and my mum is self-employed. 
If that weren't the case I would of proceeded with the purchase - regardless of what happens with the economy/CV, having fixed mortgage payments (was looking to lock in 5 years) I wasn't particularly worried since it's still half the cost of renting 
Being in the South East - I don't feel it would of impacted much since there's a massive shortage of supply anyway
Do the maths on how much property prices would have to drop in order for you to be in negative equity.
Also, you could try and renog 5-10k of the purchase price (not like there's a queue of buyers out there at the moment
Personally if I were in your position and was in rented and able to I'd bite the bullet now or wait 3 months

Try not to compare mortgage payment to rent payment.
i.e. £825 rent is 825 dead money
say £825 mortgage payment (only c. £300 is dead money for interest - whereas the rest is effectively savings into your equity)

Whats to say your current rate doesn't increase if things get worse?