To buy a house, or not to buy a house?

hazyjo

If- big IF - there is a crash, you may find lending criteria is tightened. They may want a large deposit. May drop the % they'll lend.

If you want to own your own home and can afford it, buy one. Simple as that really. As above, aim for long-term. If you're looking to move in 2 years' time, don't buy.

rincha

If you are in a position to buy then go for it. The longer you wait the quicker you could be priced out of the type of house you want. Prices will always go up, even with a doomsday crash, they will all go back up and higher. Property is selling like hot cakes and always has been. 

boxer234

I am in the process of buying a house.  I’m 99% sure the market will plummet the day after I complete.

However; my mortgage is £200 a month less than my rent, I’ve not paid over the bank valuation and i think if prices drop mortgages will be harder to get.  Also interest rates are going up I have a good deal now 5 years fixed. 

Also it will be my house no more renting stress. 

lookstraightahead

aoleks said:

Countrysider said:

We currently rent and with that, are currently throwing money down the drain on a monthly basis whereas with a mortgage, we wouldn't be.

Banks don't issue mortgages for free. They earn interest which is quite substantial over the term of the loan. Have you ever worked out how much a house costs you to buy, not in terms of agreed price + fees but in terms of amount you pay over 25 + years?

Paying interest for 25 years (often near the rent amount) could also be seen as 'throwing money away', but giving it to a bank instead of a LL. Plus everything is your responsibility and risk. New boiler/windows/roof = your cost.

The trade off is that if house prices go up then so does your investment, but obviously this is reversed in a downturn and those of us old enough to remember 2008 know who quickly sentiment goes from a house being an asset to a liability. 

completely irrelevant. the moment a mortgage is cheaper than rent, even at a high interest rate I keep most of the money for myself as the alternative is 100% wasted. also, with a house, I have the option to overpay and speed things up. I can release equity, invest, raise my quality of life, slowly add value and so on. can't do that while renting, I'm afraid.

and at the end of those 25 years, if I deduct the value of the house from all the payments (+ interest) I made, I will conclude that the house was a bargain and a financial engine that built me and my children wealth.

a renter will realise the same thing... except it's not their wealth they generated .

So long as life happens in a linear way.

hopefully it does, sometimes it doesn't. I'm not going to harp on about my own situation but I had enough curve balls to make house ownership the worse thing I did (looking back). It cost me dear. I only wish that at the time I had been renting. The outcomes would have been cheaper and less stressful. 

To be fair though I've made money with other investments which means I only have a small mortgage now, and I will shortly not have to answer to the bank.

I think investment in something is the key. It doesn't have to be house ownership. 

hpsauce86

It seems as though rent increases are on the up at the moment, as peoples mortgage rates have gone up id imagine this is why. 

Personally even if the market crashes, I’d still be happy buying in this climate, it feels for me as though it’s all relative. 

We are just about to buy a house, we’re ready, we’ve looked for 3 years, we want to start a family, have our own space, this list goes on. For us it’s the right time, we are paying someone else’s mortgage when we could be putting money in to our own asset, yes paying capital, yes it might not be worth as much as we paid for it, but we’d rather this than still be waiting years from now, and having delayed our lives. 

I guess if you have the money, you want to buy, do it. For me it’s a personal choice. (And the fact I can’t wait to not live above bars and have a constant stream of football chants 😅😂)

TonyTeacake

It all depends on your personal circumstances, for example how secure are your jobs. If you can afford it I would go for it you are fully committed, but I would recommend taking out insurances to cover your mortgage and some of your expenses if you lose your jobs.

I was talking on here months ago about the damage this rampant inflation will to do the economy.  Many people argued this will be a temporary blip but we are now seeing this play out.

House price appreciation for April is 0.3%, this is the lowest it as been since last year and I can't see this going any higher, I believe we have hit the peak and prices will decline from here and I see a big crash playing out within the next 2 years.

Unfortunately to many red flags in the economy at the moment and it looks like we are heading into stagflation, which means a recession with high inflation and high unemployment.

I do believe a Black Swan event is coming.

Sorry to sound doom and gloom but everything I was saying months ago is happening now.

I wish you luck whichever path you decide to take.

eidand

do what's best for you mate, but most importantly do no listen to these spammers who think they have a clue what's going on with the market

theoretica

How many properties are there on the market that you really like?  I would say definitely start looking - but don't put pressure on yourself to buy in a particular time frame.

Atomix

Heres my 2p worth / opinion, this is what my own personal financial head tells me.
just on the monthly rent vs monthly mortgage payment.
For every month you are renting, you are not paying that money off your mortgage.
so therefore, lets assume its £1000 rent vs equivalent £1000 mortgage for arguments sake. after x1 year of renting costs £12k. That would mean, in order to be where you should have been if you had bought, you are £12k behind on you mortgage, so therefore that year you are 24k behind. Because you have spent 12k on rent (although i get that you have to live somewhere) and to be where you should have been with your mortgage is another 12k.
And it gets worse, because you will have yet another working year of your life, not paying the mortgage off, so add another year, assuming its 25 years, it would be 24... but it isnt... repeat the above, year after year until you buy....

lookstraightahead

Atomix said:

Heres my 2p worth / opinion, this is what my own personal financial head tells me.
just on the monthly rent vs monthly mortgage payment.
For every month you are renting, you are not paying that money off your mortgage.
so therefore, lets assume its £1000 rent vs equivalent £1000 mortgage for arguments sake. after x1 year of renting costs £12k. That would mean, in order to be where you should have been if you had bought, you are £12k behind on you mortgage, so therefore that year you are 24k behind. Because you have spent 12k on rent (although i get that you have to live somewhere) and to be where you should have been with your mortgage is another 12k.
And it gets worse, because you will have yet another working year of your life, not paying the mortgage off, so add another year, assuming its 25 years, it would be 24... but it isnt... repeat the above, year after year until you buy....

So ....

what about the interest?
what if house prices come down?
what about short term buying?

im not disagreeing in just trying to balance things. You don't pay £12000 of your mortgage off in a year by paying £1000 a month.