Considering pulling out of purchase (rate rises)

comeandgo

I think you would be mad to give up and go back to renting.  Who knows what will happen in two years time.  If you will be in trouble with high rates then so will thousands of others and governments seem set on helping to keep the housing market up and buoyant.  They have been manipulating the market for years and will probably continue to do so.

Sarah1Mitty2

Murphybear said:

You talk about “moving into rented” but should be aware that decent rentals with affordable rents are getting harder and harder to find.  It could take you a long time to find somewhere suitable.  

In a recession with high mortgage rates rental will be pretty easy to find.

Sarah1Mitty2

housebuyer143 said:

Sarah1Mitty2 said:

housebuyer143 said:

Zerforax said:

The budget looks like it will make inflation run hotter in the short term and then plunge us into recession so rates will probably start coming down eventually to try and stimulate demand in the economy.

😆😆😆 To laugh or cry at this....

Why? It is basically what the so called experts in the media are saying.

Because the country is basically screwed.

People have been saying that forever though? People carrying a lot of debt are in trouble, I will admit that.

Woolsery

Cheesy77 said:

As some have said, who knows what the future will bring, but hopefully some better times for all

I won't say very much on here , but one of the prime movers in world economic terms has declared that "Things will not go back to normal.The cut is too deep."

He was referring to the changes brought about by Covid. You'll have to supply your own interpretation of 'normal.' Personally I've decided it's prudent to pay down debt and focus on securing what I have, rather than what I might like to have.

Other strategies are available.

Tiglet2

housebuyer143 said:

Gavin83 said:

Deleted_User said:

@Gavin83 Agree with what you are saying about house prices rising, but may I ask why you wouldn't have gone with a 5 year fix at 3.5%? I am about to apply to something similar so curious about why I maybe shouldn't!

I suspect interest rates will peak next year and then start to reduce so in 2 years time I suspect they'll be lower than they are now. However this is a complete guess on my part and no one knows where rates will be so it's for others to make their own decision.

Unfortunately my fixed term rate ends next year (terrible timing!) but I'll certainly be fixing for 2 years when I need to renew. I'd fix for a year if I could but I'm not sure that's an option.

The mortgage works were doing 1 year rates the last time I looked. 

The Mortgage Works are the "Buy to Let" arm of the Nationwide.  OP needs a residential mortgage.

jimbog

Sarah1Mitty2 said:

Murphybear said:

You talk about “moving into rented” but should be aware that decent rentals with affordable rents are getting harder and harder to find.  It could take you a long time to find somewhere suitable.  

In a recession with high mortgage rates rental will be pretty easy to find.

Why do you feel that'll be the case?

Sarah1Mitty2

Woolsery said:

Cheesy77 said:

As some have said, who knows what the future will bring, but hopefully some better times for all

I won't say very much on here , but one of the prime movers in world economic terms has declared that "Things will not go back to normal.The cut is too deep."

He was referring to the changes brought about by Covid. You'll have to supply your own interpretation of 'normal.' Personally I've decided it's prudent to pay down debt and focus on securing what I have, rather than what I might like to have.

Other strategies are available.

Very sensible move.

[Deleted User]

Sarah1Mitty2 said:

Woolsery said:

Cheesy77 said:

As some have said, who knows what the future will bring, but hopefully some better times for all

I won't say very much on here , but one of the prime movers in world economic terms has declared that "Things will not go back to normal.The cut is too deep."

He was referring to the changes brought about by Covid. You'll have to supply your own interpretation of 'normal.' Personally I've decided it's prudent to pay down debt and focus on securing what I have, rather than what I might like to have.

Other strategies are available.

Very sensible move.

Ignoring two questions above and responding to something else? 

Sarah1Mitty2

Cheesy77 said:

Hi all,

After some advice if possible. We've secured a new build plot and sold our current house, now a week or two from exchange. I'm now really getting quite nervous about the market and interest rates going forward. We've got a mortgage lined up at 3.1% but it's only a 2 year fix (in hindsight we should have gone with 5 years at 3.5% but thats gone now). Even 3.1% is by some way the highest rate we've paid since owning a property in the past 7 years. 

This is a big step up the ladder to a forever family home. I'm nervous about rates and the market in Sept 2024 when our fix runs out. Rates of 7% or similar I fear would really push us to the limit, alongside all the other cost of living rises. I know we'd have been stress tested by the bank but reality of actually paying 7% is pretty scary.

I'm considering pulling out of the purchase and continuing with the sale, moving into rented for a year or two and see how it plays out. But my partner is really keen to continue as we love the house. We are moving for my daughter's school more than anything. 

Am I over worrying? 2 years is a fairly long time and who knows what 2024 will bring but I'm clearly quite risk averse 

How are you feeling now? Things have changed a lot even since you posted this.