First time buyer - is it a good idea to wait to buy first home with a predicted market crash?

JJR45

peterhjohnson said:

Suppose you buy a house and the worst happens and there's a crash  followed by you needing to move. Not actually  a problem. Sure, you don't get as much from selling your old house (because of the crash) but you pay less for your next house  (because of the crash)

Surely the worst thing would be losing your house in a downturn and paying off the negative equity for a number of years?

But even on your example,if they need to move and have negative equity, unless they are downsizing, how are they going to move with negative equity?

Sarah1Mitty2

The bank would probably let you stay I think, if you paid something off the debt? Today`s news looks like a lot of the main lenders won`t be taking chances though.

jj_43

I remember purchasing back in 2006, when rates were ticking up every other month by the 0.25% and saying to the estate agent that we are committed buyers and won't be put off by the pending house price crash! House price crash was the biggest website in the UK!

We purchased when average affordability was quite high and house prices seemed too expensive, but 50% the level today. Crazy house price rises in Northern Ireland and even in Nottingham!

Our mortgage for us was very affordable and we didn't' stretch ourselves, rates increased into the financial crisis, which we didn't really notice. We didn't notice the house price declines perhaps back to 2006 levels, but we did notice the falls in interest rates afterwards. We were in the right position to buy no matter what happened to house prices or interest rates, maybe you are?

But I never experienced the house price crash in 1980/90's which is the type of crash we face now. Finally it does seem the housepricecrash posters will get their day.

Your timing is not good, the worse thing you can do is purchase at these sky high prices and at sky high interest rates. If your the typical stretched FTB in this market, good luck to you, well done to the seller!

If you have a large deposit, increasing salary, and are at buying at bottom of the property ladder and not your FTB "forever home" you should be OK.

Clearly house prices are high on some average metrics, but the market is not really priced for the average buyer, as there are sufficient wealthy purchasers around to bid prices up to the point the average buyer can't afford to purchase. That is just a realty of the market that may ensure prices remain high in nominal terms. Will we see.

Gavin83

I can’t see house prices crashing to any sort of degree that it could be considered a crash.

Interest rates are worrying though. Our fixed term deal runs out next year. I’m expecting it to be anything up to £1k extra a month which is a lot of extra money to find. We didn’t come close to stretching ourselves thankfully but I didn’t bank on rates increasing by quite this level.

Getting_greyer

Everything is volatile atm. 

Anyone fixing today could see extremes in both fiscal and monetary levers being pulled by the time the fix is over. Pure luck what the situation would look like come the end. I guess that's true for all but UK looking a bit crazy atm.

All you can do is go off what works for you based off of the facts as they stand which isn't purely limited to financial data.

london21

Depends on your personal circumstances. If you can comfortably afford to buy.

Fix for 5 years.

For a first-time buyer, the stamp duty cut will help.

No one knows for certain what the next 6-12 months will be like. 

[Deleted User]

I'd be more worried about if interest rates go up, as they are likely to. If they hit 6% and you are paying hundreds a month more, will you be able to afford it? 10%?

jonnydeppiwish!

I would say it comes down to whether you’re willing to paying off someone else’s mortgage, rather than your own, in case the market goes south.

I know where I’d rather put my money.

aoleks

yes, now is probably the time to buy, if you can secure a mortgage for around 3%. fix for 5 years and you'll be laughing.

by the time this is all gone, you'll have acquired a substantial amount of equity and will have been protected from wild fluctuations in the market over the next 2-3 years.

london21

3% 5 years fixed are non existence at present.

 aoleks said:

yes, now is probably the time to buy, if you can secure a mortgage for around 3%. fix for 5 years and you'll be laughing.

by the time this is all gone, you'll have acquired a substantial amount of equity and will have been protected from wild fluctuations in the market over the next 2-3 years.