Proceed with house purchase?

Peckarami

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

numbercruncher8

What's the area?
House price levels are a generalisation and wont affect each place evenly.
If you're planning to stay a long time in the house, price becomes less relevant. Maybe more relevant is a mortgage stress test, could you afford it if you were on the SVR? 
If there was a worst case and house prices fell, it wouldn't make much different to those who were staying anyway, but could affect the ability for some to remortgage due to LTV.

FtbDreaming

I’m part way through buying my house. Valued at £82k which was already high for this street/ area. It’ll probably drop significantly after this but at the minute i pay £400 rent. The mortgage will be £260 so I wont be Losing anything. Ive already lost £35000 in rent in the 7 years I’ve been here. Surely any mortgage paid off is actually a gain? 

Thrugelmir

Are you renting currently? 

Peckarami

We are in the south east in Suffolk and yes currently renting. We are looking to stay in that house for the foreseeable future so hopefully short term issues shouldn't affect long term growth! I'm not sure what SVR or LTV are but I'll have a look! 

[Deleted User]

The choice would be to pull out entirely with a view to a massive price crash (6-12 months + of waiting) or to proceed. Unfortunately, there is no house price data upon which to base a lower offer at this time, rather just the pure speculation about what might happen.

MobileSaver

Peckarami said:

my partners family have casted doubt about house prices and us loosing money in the long run.

There's an infamous poster on here who decided to hold off buying a house because he was convinced house prices were about to fall... that was around fifteen years ago and he's still renting now! So in all that time he has been paying off his landlord's mortgage instead of his own while living in an undesireable part of town.

Peckarami said:

The house is perfect for us and in the right location ... we got a good price and we can afford it, we both have stable secure and well paid jobs,

The first thing that happens if prices do fall is that the supply of houses falls too (many people just take their properties off the market until prices recover); the chances of the same perfect house in the right location at the right price still being available are slim at best.

The second thing that happens is lending criteria gets tightened so, for example, you may need a bigger deposit even on a cheaper house; this isn't necessarily a bad thing as long as you have the extra funds available.

Having said all that, if you are happy paying rent for another 12 months, are pretty confident they'll always be decent houses available in your preferred area and you'll still be able to get a suitable mortgage a year from now then it may be worth waiting just for a quiet life with your other half!

Peckarami

Thanks for the replies, it will help alot! She is not against going ahead, she also wants to proceed but at the same time wants to satisfy her doubts that family have given her in terms of finances. I would much rather be paying off my own mortgage than someone else's. In the long run unless there is a major crash I think we will be fine. Also the mortgage we have agreed to could potentially not be available in the future if the deposit percentage needed went up again. We are putting in 15% but I couldn't afford the same house at a 20% deposit. 

RelievedSheff

I think a lot depends on whether this house is unique and whether you plan to stay in it long term. If it is something that you would struggle to find again in say 12 months time then I would probably say carry on with the purchase. If there are loads of properties the same in the area then that would change my mind and I would hold off.

You need to consider that you will still be paying rent if you do hold off and that money could be going towards paying off your own mortgage.

If you plan for this to be a long term home would you ever forgive yourself if you lost it? Only you of course can answer these questions and you both need to be sure that what you decide to do is right for both of you.

No one knows what will happen with house prices.

greatcrested

You are buying a home. Buy it now and enjoy having your own place to live in both immediately and in the future.

If you were buying as an investment, I might advise differently. Or if you saw yourselves moving again in a few years (eg for work, growing family etc). But if this is a long-term home, then just get on with it. It was priced right at the start, the "house is perfect for you", you've already invested time, money and emotion in getting this far, so go for it.

Re-negotiate price? Well I guess it's an option, and depends how desparate the seller is, but even if they agree it introduces delay (mortgage lender amendment) and may alienate the seller who then takes all the lightbulbs out (or worse.....).

AdrianIsabel

numbercruncher8 said:

What's the area?
House price levels are a generalisation and wont affect each place evenly.
If you're planning to stay a long time in the house, price becomes less relevant. Maybe more relevant is a mortgage stress test, could you afford it if you were on the SVR? 
If there was a worst case and house prices fell, it wouldn't make much different to those who were staying anyway, but could affect the ability for some to remortgage due to LTV.

The problem is, or could be, how to know if you could afford it when you don't know the SVR that will be there waiting you after a fixed term. You can predict now, or in a few months, what BoE does with rates if things go crazy is unknown.