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

2bFrank

Its unlikely that we will have a large crash, a mild one possibly, but no one can predict the future.

No matter what happens, we still have the same issue, not enough houses for people to buy. If prices go down, then less people are going to sell, as they wont want to make a perceived loss, which means less stock on the market. the ones that have to sell (need to move, or are getting repossessed) will be the only stock and due to scarcity, will be evenly priced.

For a massive crash, you need massive repossessions, and the government are extremely hesitant for that to happen.

aoleks

london21 said:

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.

I said around 3%, that's up to 3.99%. there are currently such deals, subject to a large enough deposit.

Sarah1Mitty2

jonnydeppiwish! said:

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.

As long as you remember that you can walk away from someone else`s mortgage but not your own, being on the hook for the full mortgage debt is very different to meeting a monthly cost, and as many landlords probably don`t even have a mortgage it isn`t really a helpful comparison in my opinion, you are trying to compare two very different things.

jimbog

Sarah1Mitty2 said:

jonnydeppiwish! said:

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.

As long as you remember that you can walk away from someone else`s mortgage but not your own

where then would you walk to?

Sarah1Mitty2 said:

 many landlords probably don`t even have a mortgage it isn`t really a helpful comparison in my opinion

its a moot point. The money is still in the landlord's bank account

peterhjohnson

JJR45 said:

 how are they going to move with negative equity?

The same way they did lastime negative equity was common. Lenders moved the debt to the new property. 

Leaving a borrower in a house (say) overrun by excess kids was a recipe for default, repossession, sale at a loss and the homeless family taking their chances with social housing.

Much better for everyone if they let them trade up and take the debt with them. Especially if they did it to get a new better paying or more secure job. Lender might lose nothing in the end.

JJR45

peterhjohnson said:

JJR45 said:

 how are they going to move with negative equity?

The same way they did lastime negative equity was common. Lenders moved the debt to the new property. 

Leaving a borrower in a house (say) overrun by excess kids was a recipe for default, repossession, sale at a loss and the homeless family taking their chances with social housing.

Much better for everyone if they let them trade up and take the debt with them. Especially if they did it to get a new better paying or more secure job. Lender might lose nothing in the end.

I am fairly sure in the 2006 crash people were stuck in houses because they are in negative equity, some have only recently been able to move.
How can you get a mortgage if you are going to need more than a 100% mortgage?
Can you name a lender without horrific costs and interest rates that will lend to someone who needs more than a 100% mortgage?
I can't think of one major lender who does.

BSW89

As others have said, it's extremely difficult to call at the moment. 

We wanted to upsize and could've afforded it during the covid stamp duty holiday but everyone said prices had been inflated and would fall again - they didn't. In 2020, you could get a nice 4-bed in my area for £450-500k. It's now £515-600k for the same kind of house. I wish we'd have just taken the risk!

Then again that was a completely difficult economic situation. Think about the consequences for you if don't buy now and prices continue to rise, versus the consequences of buying now and then prices falling, then choose the one that would have least impact. 

Sarah1Mitty2

Asking prices and silly offers should just be ignored, it is actual sold and actual amount the lender will lend that count. Many people coming off fixes from the stamp duty holiday time will be in trouble now.

Sarah1Mitty2

jimbog said:

Sarah1Mitty2 said:

jonnydeppiwish! said:

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.

As long as you remember that you can walk away from someone else`s mortgage but not your own

where then would you walk to?

Sarah1Mitty2 said:

 many landlords probably don`t even have a mortgage it isn`t really a helpful comparison in my opinion

its a moot point. The money is still in the landlord's bank account

You have to stop thinking of property as a "bank account", that is how people get into financial trouble.

peterhjohnson

JJR45 said:

How can you get a mortgage if you are going to need more than a 100% mortgage?
Can you name a lender without horrific costs and interest rates that will lend to someone who needs more than a 100% mortgage?

Normally, you can't. But if you are in negative equity, you've already got a more than 100% mortgage. The question for your lender is whether your proposed move will improve their profit/risk situation. I don't know of a lender offering a scheme today but there were some in around 2008 and there may be some again.

If a borrower is in negative equity, the lender is looking at a near-certain loss if the borrower hands the keys in. A move that has the borrower eventually paying off the mortgage is potentially more attractive