Is it stupid to buy a house right now?

JeffMason

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Scotbot

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

During the time I have owned property there have been 2 crashes. Each time the market recovered as it will the next time a crash happens, the unknown being how long it will take. 
If the  OP  buys in the next year there is a fair chance he will not lose money over the long term. If he does not buy and continues to rent,which he says will cost him twice as much as buying, then there is a fair chance he will lose money over the same period. He will lose on both rent and equity as a result of paying off some of the capital.
It is a no brainer for me ,  my house had gone up by 10% prior to covid but I expect to sell in the next 2 years and if prices drop as predicted I could end up selling for less than I paid for it. But I will have lived in it for 3 to 4 years  and saved myself a whopping £ 50,400 in  rent. The cost of rental payments really adds up over time.

eidand

Scotbot said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

During the time I have owned property there have been 2 crashes. Each time the market recovered as it will the next time a crash happens, the unknown being how long it will take. 
If the  OP  buys in the next year there is a fair chance he will not lose money over the long term. If he does not buy and continues to rent,which he says will cost him twice as much as buying, then there is a fair chance he will lose money over the same period. He will lose on both rent and equity as a result of paying off some of the capital.
It is a no brainer for me ,  my house had gone up by 10% prior to covid but I expect to sell in the next 2 years and if prices drop as predicted I could end up selling for less than I paid for it. But I will have lived in it for 3 to 4 years  and saved myself a whopping £ 50,400 in  rent. The cost of rental payments really adds up over time.

Exactly, that's one my points too. Even if you pay for less, you're still coming up ahead due to saving on rent. 

markin

Crashy_Time said:

Some posters seem to think it is around sixty years, judging by some of the comments they make to me anyway, but ten might be sensible.
https://tradingeconomics.com/united-kingdom/mortgage-approvals
Take a look at this for the last 30 years or so, and definately DYOR. Good luck.

The chart surprised me actually after 2008 it never came close to getting near 100% again and it was around 6 years just for it to be stable at 60%+,, 

In london and the south im sure the price recovery will be within 5 years but remember for many other places it was a lot longer or never really happened. When i read long term i think 15 years.

Are most people now in for a long wait to get a 10-15% deposit?  Are all banks renewing the offers to people that were about to buy?

Crashy_Time

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Have you got a link to the sort of property you want to buy?

Crashy_Time

markin said:

Crashy_Time said:

Some posters seem to think it is around sixty years, judging by some of the comments they make to me anyway, but ten might be sensible.
https://tradingeconomics.com/united-kingdom/mortgage-approvals
Take a look at this for the last 30 years or so, and definately DYOR. Good luck.

The chart surprised me actually after 2008 it never came close to getting near 100% again and it was around 6 years just for it to be stable at 60%+,, 

In london and the south im sure the price recovery will be within 5 years but remember for many other places it was a lot longer or never really happened. When i read long term i think 15 years.

Are most people now in for a long wait to get a 10-15% deposit?  Are all banks renewing the offers to people that were about to buy?

And that is with rates as low as they can go plus HTB etc. Someone buying in London now needs to consider how much negative equity they can stomach if the props are removed or just stop working, and can you imagine an emergency rate hike on top of that scenario! Nightmare debt situation for many.

JeffMason

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Have you got a link to the sort of property you want to buy?

Sure. Here's one that I spotted yesterday that looked interesting. 
https://www.rightmove.co.uk/property-for-sale/property-71598669.html

Crashy_Time

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Have you got a link to the sort of property you want to buy?

Sure. Here's one that I spotted yesterday that looked interesting. 
https://www.rightmove.co.uk/property-for-sale/property-71598669.html

Looks OK, not particularly unique or exciting, just a place to live? Price seems ambitious to me in the present climate, there appears to be plenty of supply in the area and the standard asking price cut seems to be around 25k from my search with PropertyLog. Are the bank letting you go ahead with the amount of deposit you have?

JeffMason

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Have you got a link to the sort of property you want to buy?

Sure. Here's one that I spotted yesterday that looked interesting. 
https://www.rightmove.co.uk/property-for-sale/property-71598669.html

Looks OK, not particularly unique or exciting, just a place to live? Price seems ambitious to me in the present climate, there appears to be plenty of supply in the area and the standard asking price cut seems to be around 25k from my search with PropertyLog. Are the bank letting you go ahead with the amount of deposit you have?

I can't afford unique or particularly exciting in London unfortunately. And yes, I've noticed a few have dropped by around 25k recently. 

I didn't know about Property Log but that's a handy tool - thanks. 

I have a large deposit and the banks are letting me go ahead. 

Crashy_Time

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?

But if I'm not buying, I'd have to go back into renting which will cost me more than double what a mortage will.

I would have loved to have bought last year or the year before but I didn't have the deposit money or the job or the area all in place until the start of this year. 

I started looking in February with a rental agreement ending in March. I'm not staying with family but with not enough space I need to make a move soon and I'm reluctant to go back into spending so much on rent when I don't have to.

Have you got a link to the sort of property you want to buy?

Sure. Here's one that I spotted yesterday that looked interesting. 
https://www.rightmove.co.uk/property-for-sale/property-71598669.html

Looks OK, not particularly unique or exciting, just a place to live? Price seems ambitious to me in the present climate, there appears to be plenty of supply in the area and the standard asking price cut seems to be around 25k from my search with PropertyLog. Are the bank letting you go ahead with the amount of deposit you have?

I can't afford unique or particularly exciting in London unfortunately. And yes, I've noticed a few have dropped by around 25k recently. 

I didn't know about Property Log but that's a handy tool - thanks. 

I have a large deposit and the banks are letting me go ahead. 

Are you going to push for price reductions, or are you not that bothered?