Should I continue with house purchase?

ConfusedSeller

@Girlunsure333 if it's going to save you £200 a month I would just got for it. Regardless of whether you make money on selling, that money more than makes up the cost of buying/selling, and if you love the house and can see yourself living in it for 5 years + then all good. No point in having money in savings with the interest rates currently and you still need to pay for somewhere to live!!

Ozzuk

Crashy_Time said:

Ignore the posters who have just taken out big mortgage debt and walk away, you will be in serious negative equity if you buy now IMO.

Just to provide some balance against our resident harbinger of doom...the Government will likely need to carry out quantitative easing to pay for all the actions currently underway.  One result of QE is an increase in house asset value.  Holding cash becomes less attractive and several forms of investment see an upswing.
Of course, past performance doesn't guarantee future performance, but this might not be the break crashy et al are looking for.

Girlunsure333

Thank you so much for all your comments. There’s def a lot of points for me to think about. I’m currently in the mindset that if it’s meant to be it will be... I’m fortunate that the vendor is buying a deceased estate so it’s only a small chain, I’m going to ask the parties involved to put the purchase on hold for the time being to review when we have more info from the government. I’m literally getting 50/50 split at the moment of whether to continue or not. 

onthemend88

We had our mortgage offer last week and were due to complete 30th April when the house would have been completely finished. Even though our builders have ceased working on the site temporarily, we are still going ahead despite the current climate for several reasons:

1) We are both in secure jobs, as NHS workers, we are currently in demand more than ever. 
2) As the house we are buying is a new build, we have a 6 month mortgage offer which does not expire until 16th September.
3) We love the house and it will be our longterm family home. We have no intention of selling up and moving.
4) The house we are buying is £249k, reserved last April. The builder had them valued at £296k a short time before our valuation took place. If housing prices do reduce, the price may remain static (although I appreciate this is not guaranteed and we could end up in some negative equity).  
3) We are already in the process of conveyancing. 

Please don't excuse my ignorance for bliss, but as frontline NHS workers, we are seeing a lot more than most and completely understand the impact this virus is having on peoples lives and the economy.  

SouthLondonUser

What happens if you exchange contract, i.e. become legally bound to complete, but the mortgage offer expires before the property is finished and ready to move in? That's a risk I'd be very concerned about in normal times, let alone now that the risk of a delay in construction is incredibly higher.

Is it a leasehold house? Is it freehold but you have to pay for the maintenance of common areas and you have no control over the charges? How different is the price vs a non-newbuild? All of these are factors which would negatively affect the price of that property vs that of other ones.

onthemend88

@SouthLondonUser

The house is pretty much almost ready. The kitchen would have been being fitted in 10 days time and most internal work is completed. We are lucky in the fact that we have bought through a private builder who is continually communicating with us and is not pushing us to exchange. Also, our solicitor emailed us today to say that both sides will only proceed with exchange when the house is built and the completion is imminent. Once a completion date has been confirmed, both parties are looking to exchange and complete immediately. 

It is a freehold property with no maintenance charges. Non new-build properties (4 bedroom detached) are currently being sold for £280k+. 

anonymous12124

To the OP - honestly why? Why would anyone want to buy a house right now given the sums of money involved - it's just bordering on insanity. I'm not even an expert and I can tell you that prices will be falling. If banks want 40% deposits now, that shuts off a vast majority of people from the market, therefore the knock on effect is the house prices must come down. If prices don't come down how on earth will people get mortgages? Unless you're in the NHS or an essential sector you don't have a secure job and that makes it even more unlikely you'll get a mortgage.

Crashy_Time

ConfusedSeller said:

@Girlunsure333 if it's going to save you £200 a month I would just got for it. Regardless of whether you make money on selling, that money more than makes up the cost of buying/selling, and if you love the house and can see yourself living in it for 5 years + then all good. No point in having money in savings with the interest rates currently and you still need to pay for somewhere to live!!

A bad negative equity experience will cost you a lot more than £6.50 a day.

Crashy_Time

Ozzuk said:

Crashy_Time said:

Ignore the posters who have just taken out big mortgage debt and walk away, you will be in serious negative equity if you buy now IMO.

Just to provide some balance against our resident harbinger of doom...the Government will likely need to carry out quantitative easing to pay for all the actions currently underway.  One result of QE is an increase in house asset value.  Holding cash becomes less attractive and several forms of investment see an upswing.
Of course, past performance doesn't guarantee future performance, but this might not be the break crashy et al are looking for.

QE was starting up again in the EZ before this crisis hit, we never recovered from 2008, and it is low interest rates that have pushed house prices (while transactions are at half peak levels) as people were lured into more reckless borrowing by looking only at the monthly payments. Please don`t encourage even more people to think that the government have the magic bullet for everything, IMO we are heading into very choppy waters as the global economy deleverages/defaults debt and unwinds the "just in time" supply routes of globalisation.

Ozzuk

The impact on house prices as a result of QE is well documented.  Low interest rates have certainly helped the market but are you suggesting that is the only factor?  Clue...it's not.  I've haven't encouraged any, I've no agenda, I said the government will need to QE, I didn't say if that was good or bad (the impact on inflation is a strong negative for instance).  I agree we are heading for choppy waters, but in my non-professional opinion the impact to the housing market will be a pause in sales (of course) then it will likely bounce quite quickly.  Of course it may not, but people need places to live - renting could even be less attractive going forward, and with rates at historic low people could rush to secure 5 and 10 year fixed rate mortgages, which will reduce risk and reduce housing stock.