Is now a really bad time to buy a house?

jennim

My husband and I are looking to buy our first home. We have been looking for just over a year but have had awful luck with the market being the way it is, been gazumped, ourselves pulled out because of survey etc. Anyway, now we are still looking but doubts starting to creep in with the house market possibly going to crash and possibly prices fall, is it a really bad idea to buy now? Especially considering the house we buy is highly unlikely to be our forever home, so resell value in 5ish years is relevent. 
Any helpful advice much appreciated 🙏

biscan25

jennim said:

My husband and I are looking to buy our first home. We have been looking for just over a year but have had awful luck with the market being the way it is, been gazumped, ourselves pulled out because of survey etc. Anyway, now we are still looking but doubts starting to creep in with the house market possibly going to crash and possibly prices fall, is it a really bad idea to buy now? Especially considering the house we buy is highly unlikely to be our forever home, so resell value in 5ish years is relevent. 
Any helpful advice much appreciated 🙏

If you are planning to buy a house in 5 years, and your house has fallen in value, in all likelihood the house you will be buying will fall in value too. In particular, if you would be upsizing, a fall in house prices would be a 'good' thing.

My concern if I was looking to ftb now would be interest rates. I'd have to do a comparison on interest paid on the mortgage vs comparable rent repayments.

Retireby40

Why are you going to want to move in 5 years?

SadieO

We're in the process of becoming FTB and are wondering the same thing, however hindsight is really the only way to know what is/was a good or bad time to buy a house. We've just decided that now is the right time for us and we can't wait until things are "perfect" because that will never happen. House prices may rise or fall, same with interest rates etc, no-one can predict the future or we'd all be millionaires!

You just have to think carefully about the property you are buying - well, everyone does - but if resale is an issue then there are a few extra things to consider. We're hoping to stay in our house for many years so we're not bothered about buying one with things that are attractive to future buyers, as long as it is right for us. But if you are hoping to re-sell fairly soon then, for instance, would you be interested in a doer-upper that you can potentially add value to? Or, do you want to buy a house that already has desirable features that won't change no matter what happens to the market, and so is likely to always sell well - for instance good transport links, good school catchment area etc. 

Sorry for the bad luck you've had.

[Deleted User]

Hi Jen,
I totally resonate with what you're saying, especially since I am a FTB who was gazumped earlier this year too. It really sucks! Essentially, there is never going to be the perfect time to buy, there will always be factors that get in the way. House prices may drop, but mortgage rates may rise further. When I was gazumped in March, I was up against a lot of competition. This has lessened now, I believe, so seems a good time to buy for me, despite rising interest rates. However, there is no saying what might happen in the future. I think when you have found your dream home and the circumstances are right, you'll know. Good luck!

Gavin83

jennim said:

My husband and I are looking to buy our first home. We have been looking for just over a year but have had awful luck with the market being the way it is, been gazumped, ourselves pulled out because of survey etc. Anyway, now we are still looking but doubts starting to creep in with the house market possibly going to crash and possibly prices fall, is it a really bad idea to buy now? Especially considering the house we buy is highly unlikely to be our forever home, so resell value in 5ish years is relevent. 
Any helpful advice much appreciated 🙏

It's no worse/better than it was a year ago and it's no worse/better than it'll be in another year. Just buy a house when it suits your circumstances.

steampowered

Give me a crystal ball, and I'll let you know.

People have been worried about potential house price crashes for decades. The last time they were right was in 2008, 14 years ago, when there was a modest reduction in some areas (albeit a bigger crash in places like Northern Ireland). 

There will be a house price drop at some point - but nobody knows when. All you can do is make sensible decisions based on your own life circumstances. 

Retireby40

steampowered said:

Give me a crystal ball, and I'll let you know.

People have been worried about potential house price crashes for decades. The last time they were right was in 2008, 14 years ago, when there was a modest reduction in some areas (albeit a bigger crash in places like Northern Ireland). 

There will be a house price drop at some point - but nobody knows when. All you can do is make sensible decisions based on your own life circumstances. 

Northern ireland prices were crazy at one point.

My mum bought her house around 2003 for 85k. 3-4 years later she put it up for sale for 160k, recieved an offer for 159k and decided she couldn't be bothered moving in the end.

Fast forward another year or two and the house was valued again but at a modest 110k.

Nowadays it's valued at around 135k but had she made the move to sell back at the peak she would have made a pretty penny.

Timing the market is tricky. OP better find a place you would be happy living in for 10 or more years. If you are buying small now only to have a family in 3 or 4 years better just trying to buy a family house now. Doesn't have to be massive but 2 or 3 bedrooms is OK.

pinkshoes

jennim said:

My husband and I are looking to buy our first home. We have been looking for just over a year but have had awful luck with the market being the way it is, been gazumped, ourselves pulled out because of survey etc. Anyway, now we are still looking but doubts starting to creep in with the house market possibly going to crash and possibly prices fall, is it a really bad idea to buy now? Especially considering the house we buy is highly unlikely to be our forever home, so resell value in 5ish years is relevent. 
Any helpful advice much appreciated 🙏

Why won't it be your forever home?

I bought at the peak of the last market and sold after the crash due to a relationship breakdown. We sold for £10k less than we bought it for (Oxford prices didn't drop much but still a loss), BUT... If we had rented, the rent over that 5 year period of ownership would have been £850/month for an equivalent property. That's £51,000!!! The interest on the mortgage was £300/month, so £18,000 over 5 years.

So although we sold for less than we paid, over the 5 year period we actually saved money by not renting, as well as having our own home. 

Even if the price dropped 15%, we would have still saved money. 

Do some maths, and have a back up plan e.g. could you stay put if the market did crash? House prices are only relevant if you NEED to move.

RelievedSheff

We bought our last house in 2007, right before house prices took a turn. We were in negative equity with that property for a long time but it wasn't really a problem. We continued to pay the mortgage and eventually a combination of slowly rising house prices and the building of equity meant that we could move onto our current home in 2019.

Looking back, 2007 was still the right time to buy for us. We were in the position to buy our own home instead of paying rent. Rent would have been more expensive than our mortgage. The big lesson learned for us was to take our mortgage over as short a term as possible to pay less interest. We paid far too much interest on the previous  house due to the long 30 year term we took out and not being able to remortgage due to negative equity.

london21

No one really knows.

So much uncertainty.
Prices have only gone up since the predictions been made since forever.

If you need somewhere to live, make reasonable offer and compare with prices in the area you are looking to buy in.