Is now really a bad time to buy?

LitBill

I’d be keen to get some advice on this before I explode further, so any help appreciated.

We are currently into the 3rd year of living in our (a couple, no dependants) first time home. It was never going to be a long term home for us, perhaps 5 years and then look for something bigger to accommodate a family.

I’ve been doing some reading and listening and it seems some are suggesting that now may be a good time to upsize.

The value of our current home won’t be as high as it would be outside the current crisis - completely understood! But the potential savings on a property that may be twice the usual value in normal circumstances may be greater than the loss in selling now.

We live in a desirable area, with a perfect house for first timers. House prices are notoriously high in the area (and we want to stay in the same area). The current estimated value leaves us with equity that could cover the deposit of the type of house we are looking for (plus some savings of our own).

I’d appreciate your thoughts.

blue_max_3

This is a decision many face. If you haven't started looking for a new place, what will you do if you do get an offer?
If you can move out easily, back to parents or rent etc, then it might make sense.
From what you say, it would seem you don't have too much to lose by staying put and seeing if you can find your next home first.

Windofchange

If the sums work and your jobs are secure then now is as good a time as any. This is particularly true if your next house is a forever home as any short term turbulence will be offset by time. I personally prioritise life and happiness over money, so wouldn't be that bothered if the paper worth of my home fell in the short to medium term anyway. You will have your own life priorities, and will decide accordingly. If children are on the horizon I would suggest now is a better time to be going through the stress of a new house than when you have a screaming infant on your hands...

robatwork

I think it's a fantastic time to buy if you're upsizing. 

I can see prices have fallen and expect them to bounce back and more before the end of the year. So the house you're buying will probably appreciate more than the one you're in.

Of course this is just my opinion.

abanksee

Windofchange said:

If the sums work and your jobs are secure then now is as good a time as any. This is particularly true if your next house is a forever home as any short term turbulence will be offset by time. I personally prioritise life and happiness over money, so wouldn't be that bothered if the paper worth of my home fell in the short to medium term anyway. You will have your own life priorities, and will decide accordingly. If children are on the horizon I would suggest now is a better time to be going through the stress of a new house than when you have a screaming infant on your hands...

Or you could wait 6-12 months and make a decent saving on your next purchase. Once we start seeing all these price reductions come through the land registry we will be in a better place to know.

LitBill

We definitely are not close to a deposit with our personal savings but the equity in our current house should be plenty. 

There’s definitely some risk but the idea has crept in I think because we’re both still working and earning in secure jobs and saving by not doing most of the big ticket things we would normally do this year (holidays, trips out, fuel for the car).

Houses are popping up on the market that we’re definitely interested in exploring too.

MobileSaver

LitBill said:

I’ve been doing some reading and listening ...The value of our current home won’t be as high as it would be outside the current crisis

Really? I think you've been listening to the wrong people!

Despite what some people on here would have you believe, house prices have not suddenly dropped in value across the board because of coronavirus. If prices fall like they did with the last financial crisis then it took 18 months for significant falls to happen.

Even then, the underlying reasons behind any downturn are very different to a decade ago and many believe the enforced lockdown may well lead to a house price increase in certain types of property; your perfect FTB house in a desirable area could well be one of them.

eidand

Look, your house isn't worth what some people on a random forum tell you. Get it evaluated, look at similar properties around you etc, to get an idea. Don't listen to the crash crowd, none of them owns anything and can't really advise someone.

[Deleted User]

Prices are already dropping near me. Ive been carefully watching the market for almost a year and places that were £220k are now £205 ish fresh on the market ( for my FTB sons and also a BTL ) 
lots reduced as well or coming back on the market that were previously sold. 

I was talking to an agent I know the other day and she said a housing association was snapping up new build properties pre covid and pulled out the lot of them. 

There is a massive recession coming but people do still need to move

As you have a house that would be snapped up very quickly ( I know the type as we have some in this area ) Id suggest you look for that forever home 
I bought mine at aged 34 in 2000 - HUGE HUGE stretch, but I was prepared to risk it for the house of my dreams. I’ll never move. 

If you can see prices changing downwards in your area and have safe jobs and could afford the stretch, then Id try and get as best deal as possible as moving and all the whole conveyancing process is very stressful and costly and best if you can skip a middle step ! 

MobileSaver

Densol said:

 Ive been carefully watching the market for almost a year
lots reduced as well or coming back on the market that were previously sold.

What's the area so we can all take a look at all these reduced properties?

Crashy_Time

MobileSaver said:

LitBill said:

I’ve been doing some reading and listening ...The value of our current home won’t be as high as it would be outside the current crisis

Really? I think you've been listening to the wrong people!

Despite what some people on here would have you believe, house prices have not suddenly dropped in value across the board because of coronavirus. If prices fall like they did with the last financial crisis then it took 18 months for significant falls to happen.

Even then, the underlying reasons behind any downturn are very different to a decade ago and many believe the enforced lockdown may well lead to a house price increase in certain types of property; your perfect FTB house in a desirable area could well be one of them.

Are you hoping that your property might benefit by any chance? The crisis has been bad enough to cause economic damage, but not scary enough to most people to cause a stampede away from the cities, and of course most buyers are going to now be working with reduced loans from the banks. Nice to dream though I suppose.