First time buyers...worth holding off?

Josh_Marks

My girlfriend and I have so far raised a deposit of £31k and are actively looking for a property in the region of £300-350k. We are fortunate enough to be renting off parents, and there is obligation for us to move any time soon. 
My question is: should we try to secure a 90% LTV mortgage now, or is it worth holding off buying until next year- when house prices have supposedly dropped? My concern is, if we do wait, that mortgages will be harder to come by and we still might not have raised enough cash for a 85% LTV mortgage.
We are both in reasonably secure jobs and although I don't anticipate my wages rising any time soon, we do currently have a combined income of £82k. Buying now and then seeing the value of your house immediately fall also worries me. 
Interested in thoughts here. 
Thanks in advance.  

tweeto

Personally I would crack on with it now, as nobody can predict the future as to what house prices will do. There will always be positives and negatives no matter when you decide to buy.

You's are in a great position, both renting from parents and your jobs/salary. If you start looking now you can take your time to ensure you get the perfect property with zero pressure if things go wrong...... Best of luck to you both!  

Thrugelmir

With an £82k pa income why are you struggling to save?  If you are looking at £350k houses then your deposit is short of the mark in any event.  The time to buy is when you find somewhere that you want to make a home that you can afford. Little point worrying about macro economic events which are outside of your control. 

orangepeel105

My partner and I are FTB, purchasing a house for 360 with a 10% deposit.  We decided to do it now firstly to take advantage of the stamp duty reduction, which will have saved us a couple of thousand, and secondly because we are looking for a longer term home that we plan to live in for a good few years at least, so it won't really matter too much what happens over the next couple of years.  I'd really base your decision on your budget (do you have enough saved to get the home you want, plus fees and furniture, decoration etc.) and whether you're looking to buy somewhere to live longer term or not.

tim_london

House price rise and fall all the time and you shouldn't worry too much about it especially if it is your main residence.  

90% LTV would not give you the best interest rate, I think the extra interest you would pay outweighs any perceived risk of house price fall.  So the more you save, the less you give away to the bank.  However that is also not a deal breaker and is an invalid way to think.

For example say you want to do it now and because of 90% LTV you can only get 3% interest mortgage.  3% rate, 25year mortgage and £350k loan the monthly payment is around £1500 and half of that is interest to bank initially.  Question is - how much are you paying rent right now?  If it is over £750 then technically you are saving money.  

Even if your rent is under £750, then the delta is the privilege of owning a house.  It depends on your situation and whether it is worth it is up to you.

ACG

If house prices start dropping, you are probably going to see 90% deals either reduce or become more expensive. 

For me personally, if I was renting, I would probably crack on and buy if I had a 10% deposit. If the house value drops who cares? The value is only important when it comes to a remortgage or selling. If my house is worth £50k or £500k it makes no odds to me as its all relative. 

MovingForwards

You are in a comfortable position compared to most people who are renting.

When I had everything lined up I viewed, offered and instructed my broker / solicitor to crack on. My deposit was 15%.

I made a rounding up overpayment the first two mortgage payments, now I'm doing a bigger payment each month, next year I'm looking to increase my O/P again by 25%, all still within the 10% allowable overpayment set out by the lender.

Negative equity doesn't bother me as I've no plans to move.

anewbuyer

I think if house prices crash it will only be because regular people cannot access mortgages anymore, which will lower the demand and therefore the prices.

I would buy now if you want to live there longterm and I would not risk not being able to get a mortgage in the future.