Should I sell due to impending crash?

Booge

Hi

i bought a house last December. I delayed a long time because I saw what happened in 2008 and was always anxious that would happen again. I always used to say the moment I did decide to buy my luck would be that we would go into another global recession and that’s what appears to be happening now.

I bought the house with £450k deposit (savings plus an inheritance) and borrowed £250k. Bought house for £700k in London borough of hillingdon

zoopla now claims it is worth £760k but obviously that’s a hypothetical value. Paid £26k in stamp duty

with an impending recession coming and possibly a 1930s style depression lasting a decade I’m thinking of selling it again and buying a 2 bed flat in similar area that I can do in cash without a mortgage

wbat I’m concerned about is significant price drops in house value/ remortgaging at higher rates/ being the only person paying it/ possible job loss and being forced to then sell the house at a huge loss. 

At the moment I’m find paying the mortgage and even if rates went up to 5% I could still pay it. But obviously if I lost my job then I couldn’t. 

Are others thinking of selling too?

Id need to act very fast though I think as the imminent collapse will come this autumn I suspect. 

Jonathan 

pinkshoes

The house price crash has been "imminent" for 20+ years... !

Just think of it as a home. Surely the place you bought now was a long term place to live? 

If you need help with the mortgage then you could get a lodger. Lots of people work in the city during the week or a couple  of days a week and need somewhere to stay.

Or if you are worried about losing your job then moving somewhere and being mortgage free is always a good option.

Flugelhorn

honestly?

you have to live somewhere - maybe you have overstretched yourself and would be happier in a smaller place with no mortgage?

I am not thinking of selling - have been through multiple house price booms and busts and mortgage interest rates of 13% - my job was rock solid and there was always plenty of work so that wasn't a problem

Snookie12cat

I'm so sick of these posts from people with their crystal balls. You should start playing the lottery because you are so certain of the future.


If you want to move, then move. I doubt others are selling the houses they just bought in droves because of something that might or might not happen. 

TripleH

House price crashes are an issue if you have a high Loan to Value and a very small deposit.

If you are planning to live in the same property for the next 5 years+ then I wouldn't be bothered by a fall in prices at all.

This isn't 2008 (it's in too recent a memory), people won't have over inflated loans on houses of 125%. Prices may fall but unless the population of this country plummets there is no reason for prices to fall to a lower level and stick there.

TimSynths

pinkshoes said:

The house price crash has been "imminent" for 20+ years... !

In that time frame (19 years this month) mine has more than doubled. I'm not selling either, to rent next door is 2x my current mortgage.

propertyhunter

Don't worry about what might happen. You're actually in a really good financial position versus most people in the country. It is daunting having just bought and the market changing direction, but your financial loss will only be exacerbated (and realised) by selling to buy a flat. Flats will likely fall proportionately more in value than a house, especially in Hillingdon since all they build now in London is flats and not houses. You can absorb substantial rises in mortgage interest too - so you're not in imminent danger of being in financial difficulty. Let's not forget the fees involved in selling and buying. 

Zoopla says you've got a 60k uplift - and actually I live in Hillingdon, and the predicted Zoopla prices have then been reflected in actual sold prices, so it is likely you've got that cushion too. 

I would not sell or even be thinking of selling. 

bouicca21

There’s always a crash.  No one knows when it will happen.  They last a couple of years but never (in my experience) fall to pre crash levels.  There’s always a bubble. No one knows when it will happen.  They last a couple of years.

As my dad used to say, once you own a place, crash/bubble, it’s all Monopoly money.  The constant is that you have a home.

Snookie12cat

bouicca21 said:

There’s always a crash.  No one knows when it will happen.  They last a couple of years but never (in my experience) fall to pre crash levels.  There’s always a bubble. No one knows when it will happen.  They last a couple of years.

As my dad used to say, once you own a place, crash/bubble, it’s all Monopoly money.  The constant is that you have a home.

It feels to me like monopoly money when you get to house price borrowing. I can agonise over a small purchase for weeks, but walk into a house and offer to buy it after seeing it for 10 mins... 

I sometimes think prices are so far detached from reality that my brain just processes it completely different to everything else. 

TripleH

Plus institutions got burnt in a global mess which increased the size of the crash. There is far more cautious behaviour to lessen bubbles growing that quickly.

Plus don't think of it as a crash but a temporary readjustment. A recession does not always means fall in house prices.

Flugelhorn

Snookie12cat said:

It feels to me like monopoly money when you get to house price borrowing. I can agonise over a small purchase for weeks, but walk into a house and offer to buy it after seeing it for 10 mins... 

I agree - it is the speediest spending of huge amounts of money even amongst those who carefully weigh up other purchases, and when price negotiation starts 1-2k, 5k, 10k etc etc it all is definitely monopoly money