Currently living rent-free with my parents - should I buy or wait until a "better" time?

Seandlee24

OP here - thanks everyone for your inputs (with the exception of the spam poster!). 

I think the majority seem to agree it is a good idea to wait at least a little while to see what will happen with house prices (which will probably drop) and interest rates (which will probably rise) and continue building up a deposit. By no means desperate to move out of my parents, although it can get a little cramped, is in the middle of nowhere and it'd be nice to have my own space. Certainly can wait it out for 6 months or so and see what thing look like in the Spring. 

Having looked again at my MSE budget spreadsheet, I suspect £1,200 p/m on a mortgage (which was right at the top of my house-buying budget) is probably a little more than I can comfortably afford, so will readjust my search down by about 10% - which coincidentally may be what house prices fall by. 

Regarding someone's question on mortgage length - I was advised by the mortgage broker to go 35 over 25 as simply put it will be more affordable in the S/T, and my state retirement age is still more than 35 years away Can always change when I remortgage in the future I guess? 

Sarah1Mitty2

Gycraig said:

MobileSaver said:

Woolsery said:

MobileSaver said:

Woolsery said:

BikingBud said:

Gycraig said:

MobileSaver said:

Gycraig said:

MobileSaver said:

Gycraig said:

There is a massive difference between my bank stress testing me up to a 1200 pound a month on my mortgage and me and others actually wanting to pay that. 

You may not want to pay that but most people will prioritise paying for a roof over their head above paying for many other non-essential things.

Gycraig said:

Plenty of people I know who where ready for “the next step” are now staying at where they are. Only time will tell but I don’t see how it’s gonna be sustainable long term to have these interest rates / energy prices before everything crashes around us.  

It would appear that people you know are not representative of the general public. The latest official housing stats are out and just last month 100,000 people bought a house which is roughly the same number who bought a house every month for the last ten years.

It always amuses me when people predict "everything crashes around us" rather than the more likely and more obvious that prices will probably just stagnate, going up a little and down a little over the next few years.

Aren’t people buying a house now still likely to be on 2% ish mortgage offers ?/ likely to have offered a fair amount of time ago on the property ?

Possibly, who knows? Don't forget that a third of all property purchases are for cash, no mortgage involved and these people are happily putting their money where their mouth is.

Gycraig said:

People may still move but it will be to cheaper houses in general,

Where are all these cheaper houses going to come from?

Further down the housing pyramid ? When I was a first time buyer I bought a nice 2 bed for 138k at current rates I would have probably bought a 80k house and done some work or something, the higher up the ladder you go the more these interest rates are a kick in the face. 

The next level of house for me is going to cost triple what my current mortgage is costing me. I can’t afford that comfortably and I don’t think many families can. I’m possibly wrong but I don’t see how energy bills can quadruple, mortgages can go up 50-60 percent and house prices stay the same or go up. 

The property ladder is a fallacy, if the gaps are extreme there is no upward motion. 

One of my children was evicted by a landlord, keen to sell before the drop. She's returned home with her husband, and together they're saving at an even greater rate than the OP, knowing they won't be evicted again. Why on earth would they rush out and buy right now?

If them living with you is so great why would they ever want to buy their own place? Why not just live in your home permanently?

You're misrepresenting my meaning. I didn't say it was 'great,' though we're lucky enough to have enough space. I'm saying it's a prudent measure, given the parlous economic times. Until things become clearer, nothing's being lost by waiting to see how the dice fall, particularly with regard to employment.

It was a tongue in cheek comment to highlight that the right time to buy is when they need their own home rather than trying to time the market. Of course it's great that you can temporarily put them up while they continue saving for a deposit.

However, conversely, it's false economy waiting several years for boom times to come or house prices to fall if, for example, in the meantime your daughter's marriage falls apart because hubby is increasingly resentful about living with in-laws or your own relationships become strained for the same reason.

I can’t see it taking “years” most landlords forums / groups seems to have record amounts of people selling up as they just can’t make btl work on the current interest rates. 

Regarding becoming “resentful” it depends what the parents house is like really, my wife’s parents had a “spare” bedroom with an en-suite and a spare front room. Only thing we shared was kitchen.

Who is buying though, the market for those sorts of properties have seen their mortgage rate basically quadrupled in the last few weeks? Do you mean record amounts of people talking about trying to sell up?

Gycraig

Sarah1Mitty2 said:

Gycraig said:

MobileSaver said:

Woolsery said:

MobileSaver said:

Woolsery said:

BikingBud said:

Gycraig said:

MobileSaver said:

Gycraig said:

MobileSaver said:

Gycraig said:

There is a massive difference between my bank stress testing me up to a 1200 pound a month on my mortgage and me and others actually wanting to pay that. 

You may not want to pay that but most people will prioritise paying for a roof over their head above paying for many other non-essential things.

Gycraig said:

Plenty of people I know who where ready for “the next step” are now staying at where they are. Only time will tell but I don’t see how it’s gonna be sustainable long term to have these interest rates / energy prices before everything crashes around us.  

It would appear that people you know are not representative of the general public. The latest official housing stats are out and just last month 100,000 people bought a house which is roughly the same number who bought a house every month for the last ten years.

It always amuses me when people predict "everything crashes around us" rather than the more likely and more obvious that prices will probably just stagnate, going up a little and down a little over the next few years.

Aren’t people buying a house now still likely to be on 2% ish mortgage offers ?/ likely to have offered a fair amount of time ago on the property ?

Possibly, who knows? Don't forget that a third of all property purchases are for cash, no mortgage involved and these people are happily putting their money where their mouth is.

Gycraig said:

People may still move but it will be to cheaper houses in general,

Where are all these cheaper houses going to come from?

Further down the housing pyramid ? When I was a first time buyer I bought a nice 2 bed for 138k at current rates I would have probably bought a 80k house and done some work or something, the higher up the ladder you go the more these interest rates are a kick in the face. 

The next level of house for me is going to cost triple what my current mortgage is costing me. I can’t afford that comfortably and I don’t think many families can. I’m possibly wrong but I don’t see how energy bills can quadruple, mortgages can go up 50-60 percent and house prices stay the same or go up. 

The property ladder is a fallacy, if the gaps are extreme there is no upward motion. 

One of my children was evicted by a landlord, keen to sell before the drop. She's returned home with her husband, and together they're saving at an even greater rate than the OP, knowing they won't be evicted again. Why on earth would they rush out and buy right now?

If them living with you is so great why would they ever want to buy their own place? Why not just live in your home permanently?

You're misrepresenting my meaning. I didn't say it was 'great,' though we're lucky enough to have enough space. I'm saying it's a prudent measure, given the parlous economic times. Until things become clearer, nothing's being lost by waiting to see how the dice fall, particularly with regard to employment.

It was a tongue in cheek comment to highlight that the right time to buy is when they need their own home rather than trying to time the market. Of course it's great that you can temporarily put them up while they continue saving for a deposit.

However, conversely, it's false economy waiting several years for boom times to come or house prices to fall if, for example, in the meantime your daughter's marriage falls apart because hubby is increasingly resentful about living with in-laws or your own relationships become strained for the same reason.

I can’t see it taking “years” most landlords forums / groups seems to have record amounts of people selling up as they just can’t make btl work on the current interest rates. 

Regarding becoming “resentful” it depends what the parents house is like really, my wife’s parents had a “spare” bedroom with an en-suite and a spare front room. Only thing we shared was kitchen.

Who is buying though, the market for those sorts of properties have seen their mortgage rate basically quadrupled in the last few weeks? Do you mean record amounts of people talking about trying to sell 

People who need a house ? Not everyone can live at home until they are ready, btl mortgage on my property has gone from 250 ish to 600, so the 800 my neighbour is renting for went from being massively profitable to probably being in the red over all. It’s a nightmare to predict tbh but tenants are gonna get destroyed more than home owners. 

Rental properties also generally tend to be the lower end of the market so shouldn’t really struggle to sell, I don’t think starter homes will struggle to kick it will be more the “second step” houses that people traditionally move up to. 

Sarah1Mitty2

Gycraig said:

Sarah1Mitty2 said:

Gycraig said:

MobileSaver said:

Woolsery said:

MobileSaver said:

Woolsery said:

BikingBud said:

Gycraig said:

MobileSaver said:

Gycraig said:

MobileSaver said:

Gycraig said:

There is a massive difference between my bank stress testing me up to a 1200 pound a month on my mortgage and me and others actually wanting to pay that. 

You may not want to pay that but most people will prioritise paying for a roof over their head above paying for many other non-essential things.

Gycraig said:

Plenty of people I know who where ready for “the next step” are now staying at where they are. Only time will tell but I don’t see how it’s gonna be sustainable long term to have these interest rates / energy prices before everything crashes around us.  

It would appear that people you know are not representative of the general public. The latest official housing stats are out and just last month 100,000 people bought a house which is roughly the same number who bought a house every month for the last ten years.

It always amuses me when people predict "everything crashes around us" rather than the more likely and more obvious that prices will probably just stagnate, going up a little and down a little over the next few years.

Aren’t people buying a house now still likely to be on 2% ish mortgage offers ?/ likely to have offered a fair amount of time ago on the property ?

Possibly, who knows? Don't forget that a third of all property purchases are for cash, no mortgage involved and these people are happily putting their money where their mouth is.

Gycraig said:

People may still move but it will be to cheaper houses in general,

Where are all these cheaper houses going to come from?

Further down the housing pyramid ? When I was a first time buyer I bought a nice 2 bed for 138k at current rates I would have probably bought a 80k house and done some work or something, the higher up the ladder you go the more these interest rates are a kick in the face. 

The next level of house for me is going to cost triple what my current mortgage is costing me. I can’t afford that comfortably and I don’t think many families can. I’m possibly wrong but I don’t see how energy bills can quadruple, mortgages can go up 50-60 percent and house prices stay the same or go up. 

The property ladder is a fallacy, if the gaps are extreme there is no upward motion. 

One of my children was evicted by a landlord, keen to sell before the drop. She's returned home with her husband, and together they're saving at an even greater rate than the OP, knowing they won't be evicted again. Why on earth would they rush out and buy right now?

If them living with you is so great why would they ever want to buy their own place? Why not just live in your home permanently?

You're misrepresenting my meaning. I didn't say it was 'great,' though we're lucky enough to have enough space. I'm saying it's a prudent measure, given the parlous economic times. Until things become clearer, nothing's being lost by waiting to see how the dice fall, particularly with regard to employment.

It was a tongue in cheek comment to highlight that the right time to buy is when they need their own home rather than trying to time the market. Of course it's great that you can temporarily put them up while they continue saving for a deposit.

However, conversely, it's false economy waiting several years for boom times to come or house prices to fall if, for example, in the meantime your daughter's marriage falls apart because hubby is increasingly resentful about living with in-laws or your own relationships become strained for the same reason.

I can’t see it taking “years” most landlords forums / groups seems to have record amounts of people selling up as they just can’t make btl work on the current interest rates. 

Regarding becoming “resentful” it depends what the parents house is like really, my wife’s parents had a “spare” bedroom with an en-suite and a spare front room. Only thing we shared was kitchen.

Who is buying though, the market for those sorts of properties have seen their mortgage rate basically quadrupled in the last few weeks? Do you mean record amounts of people talking about trying to sell 

People who need a house ? Not everyone can live at home until they are ready, btl mortgage on my property has gone from 250 ish to 600, so the 800 my neighbour is renting for went from being massively profitable to probably being in the red over all. It’s a nightmare to predict tbh but tenants are gonna get destroyed more than home owners. 

Rental properties also generally tend to be the lower end of the market so shouldn’t really struggle to sell, I don’t think starter homes will struggle to kick it will be more the “second step” houses that people traditionally move up to. 

It sounds like you didn`t read my point -  The people who would previously have bought these "lower end of the market" properties (if landlords were not hogging them) can no longer afford the monthly payments on them since mortgages started going back to more normal pricing, so unless the landlord is going to drop the price a lot they won`t find buyers now. Can`t see how the tenant gets "destroyed" when the landlord is liable for the debt? Plenty of landlords bought years ago or don`t have a mortgage, they can afford to drop rents or keep the same, there will be less tenants in a recession not more. The biggest losers will be those with the most mortgage debt, which is why I find it surprising that the OP is in a hurry to throw their savings into property at this stage!

Gycraig

Sarah1Mitty2 said:

Gycraig said:

Sarah1Mitty2 said:

Gycraig said:

MobileSaver said:

Woolsery said:

MobileSaver said:

Woolsery said:

BikingBud said:

Gycraig said:

MobileSaver said:

Gycraig said:

MobileSaver said:

Gycraig said:

There is a massive difference between my bank stress testing me up to a 1200 pound a month on my mortgage and me and others actually wanting to pay that. 

You may not want to pay that but most people will prioritise paying for a roof over their head above paying for many other non-essential things.

Gycraig said:

Plenty of people I know who where ready for “the next step” are now staying at where they are. Only time will tell but I don’t see how it’s gonna be sustainable long term to have these interest rates / energy prices before everything crashes around us.  

It would appear that people you know are not representative of the general public. The latest official housing stats are out and just last month 100,000 people bought a house which is roughly the same number who bought a house every month for the last ten years.

It always amuses me when people predict "everything crashes around us" rather than the more likely and more obvious that prices will probably just stagnate, going up a little and down a little over the next few years.

Aren’t people buying a house now still likely to be on 2% ish mortgage offers ?/ likely to have offered a fair amount of time ago on the property ?

Possibly, who knows? Don't forget that a third of all property purchases are for cash, no mortgage involved and these people are happily putting their money where their mouth is.

Gycraig said:

People may still move but it will be to cheaper houses in general,

Where are all these cheaper houses going to come from?

Further down the housing pyramid ? When I was a first time buyer I bought a nice 2 bed for 138k at current rates I would have probably bought a 80k house and done some work or something, the higher up the ladder you go the more these interest rates are a kick in the face. 

The next level of house for me is going to cost triple what my current mortgage is costing me. I can’t afford that comfortably and I don’t think many families can. I’m possibly wrong but I don’t see how energy bills can quadruple, mortgages can go up 50-60 percent and house prices stay the same or go up. 

The property ladder is a fallacy, if the gaps are extreme there is no upward motion. 

One of my children was evicted by a landlord, keen to sell before the drop. She's returned home with her husband, and together they're saving at an even greater rate than the OP, knowing they won't be evicted again. Why on earth would they rush out and buy right now?

If them living with you is so great why would they ever want to buy their own place? Why not just live in your home permanently?

You're misrepresenting my meaning. I didn't say it was 'great,' though we're lucky enough to have enough space. I'm saying it's a prudent measure, given the parlous economic times. Until things become clearer, nothing's being lost by waiting to see how the dice fall, particularly with regard to employment.

It was a tongue in cheek comment to highlight that the right time to buy is when they need their own home rather than trying to time the market. Of course it's great that you can temporarily put them up while they continue saving for a deposit.

However, conversely, it's false economy waiting several years for boom times to come or house prices to fall if, for example, in the meantime your daughter's marriage falls apart because hubby is increasingly resentful about living with in-laws or your own relationships become strained for the same reason.

I can’t see it taking “years” most landlords forums / groups seems to have record amounts of people selling up as they just can’t make btl work on the current interest rates. 

Regarding becoming “resentful” it depends what the parents house is like really, my wife’s parents had a “spare” bedroom with an en-suite and a spare front room. Only thing we shared was kitchen.

Who is buying though, the market for those sorts of properties have seen their mortgage rate basically quadrupled in the last few weeks? Do you mean record amounts of people talking about trying to sell 

People who need a house ? Not everyone can live at home until they are ready, btl mortgage on my property has gone from 250 ish to 600, so the 800 my neighbour is renting for went from being massively profitable to probably being in the red over all. It’s a nightmare to predict tbh but tenants are gonna get destroyed more than home owners. 

Rental properties also generally tend to be the lower end of the market so shouldn’t really struggle to sell, I don’t think starter homes will struggle to kick it will be more the “second step” houses that people traditionally move up to. 

It sounds like you didn`t read my point -  The people who would previously have bought these "lower end of the market" properties (if landlords were not hogging them) can no longer afford the monthly payments on them since mortgages started going back to more normal pricing, so unless the landlord is going to drop the price a lot they won`t find buyers now. Can`t see how the tenant gets "destroyed" when the landlord is liable for the debt? Plenty of landlords bought years ago or don`t have a mortgage, they can afford to drop rents or keep the same, there will be less tenants in a recession not more. The biggest losers will be those with the most mortgage debt, which is why I find it surprising that the OP is in a hurry to throw their savings into property at this stage!

People like me when I bought will be buying these cheaper landlord properties instead of new builds in all likeliness. If I was buying now in the circumstance I was  in 5 years ago I would not be buying my house at its current price I would be buying a doer uper probably ex rental at the lower end of the market. 

The tenant gets “destroyed” because the price of btl mortgages have gone up 50% at the standard 25% deposit btl mortgage. 

When rents start going up do you really think these landlords who own properties outright/have smaller mortgages are going to leave that money on that table ?. The cost to keep the new mortgages profitable are going to be crippling for landlords and tenants. 

How will there be “less tenants” in a recession exactly, where are they going to go ? 

andyr24

I am pretty much in the same position as you. I've just sold my house while prices were good and decided to live with my parents as prices are, without a doubt, going to fall. Demand where I live has fallen flat with sales agreed now taking several weeks as opposed to several hours or several days a few months back.

If you're thinking with your head and not your heart, then you should wait. However, it is worth noting, there is often a slight lag between house prices and mortgage rates, although it is clear now that the higher mortgage rates are dampening demand. I would estimate that house prices are going to be at their trough in 2 years and articles online saying to wait until 2024 to buy a house (but you have to use your own initiative and judgement).

All of that said, sometimes exceptional opportunities do present themselves, which when looked into (even with high prices) do make some financial sense. I would never say never, and if something that is too good of an opportunity to ignore comes onto the market in that time period you should definitely consider it.

I suppose you need to weigh up if your decision to not think with your heart and get something you absolutely love will bother you later on as opposed to viewing it purely as a financial objective.

MobileSaver

andyr24 said:

I am pretty much in the same position as you. I've just sold my house while prices were good and decided to live with my parents

Is it just you moving back in with parents or you and boyfriend/girlfriend/husband/wife? In an emergency I could probably manage a month or two but planning on living back with parents for a year or more... that's just unthinkable. Fair play to you and your parents if you can happily manage that.

andyr24 said:

If you're thinking with your head and not your heart, then you should wait. ... I would estimate that house prices are going to be at their trough in 2 years

I can't imagine putting part of my life on hold for 2 years but each to their own.

What happens if in 2 years house prices haven't dropped as you'd expected? What does "thinking with your head" suggest you do then, keep waiting? (To give some context, one poster here sold up over ten years ago and has spent the last 10 years convinced prices will crash but of course they never did and now never will drop to the level he needs to have been proven right.)

Woolsery

MobileSaver said:

I can't imagine putting part of my life on hold for 2 years but each to their own.

What happens if in 2 years house prices haven't dropped as you'd expected?

I believe people frequently put parts of their lives on hold, so it's no big deal. The examples are too numerous to detail, but they might include the intense saving period while getting a deposit together, doing a degree by fast track, or something more unusual, like people near us living in a caravan on-site while they gut and re-build a concrete bungalow. They're going to have an 'interesting' winter!

And didn't the government recently put many of our lives on-hold for extended periods? Maybe not mine so much, as I wasn't much affected or convinced, but I watched others suffer, or even close their businesses. Adversity and opportunities cause people to alter their behaviour and delay gratification all the time, but I wouldn't be so dogmatic as to put a time limit on something unpredictable like a purchase; if something comes up that fits the bill, financially and in other respects, they should go for it

lookstraightahead

Woolsery said:

MobileSaver said:

I can't imagine putting part of my life on hold for 2 years but each to their own.

What happens if in 2 years house prices haven't dropped as you'd expected?

I believe people frequently put parts of their lives on hold, so it's no big deal. The examples are too numerous to detail, but they might include the intense saving period while getting a deposit together, doing a degree by fast track, or something more unusual, like people near us living in a caravan on-site while they gut and re-build a concrete bungalow. They're going to have an 'interesting' winter!

And didn't the government recently put many of our lives on-hold for extended periods? Maybe not mine so much, as I wasn't much affected or convinced, but I watched others suffer, or even close their businesses. Adversity and opportunities cause people to alter their behaviour and delay gratification all the time, but I wouldn't be so dogmatic as to put a time limit on something unpredictable like a purchase; if something comes up that fits the bill, financially and in other respects, they should go for it

Wise words. Not 'owning' a house doesn't equate to life on hold, especially when you know there's a financial risk (eg if you're going to sell again soon, and surely staying somewhere for eons isn't totally living it up).  In fact, for me, owning property at an early age put me back years (bought height of market, ended up with negative equity).

it is ok to stand still for a while so that you create room in your life for new things to come into it.

We do need to make sure parents are happy to have children living with them though,  before any assumptions are made. They also have a life too. I'm in my fifties and I like my freedom, so I'd have to know how long my kids would be staying for 😂. Love 'em 🥰

Gycraig

MobileSaver said:

andyr24 said:

I am pretty much in the same position as you. I've just sold my house while prices were good and decided to live with my parents

Is it just you moving back in with parents or you and boyfriend/girlfriend/husband/wife? In an emergency I could probably manage a month or two but planning on living back with parents for a year or more... that's just unthinkable. Fair play to you and your parents if you can happily manage that.

andyr24 said:

If you're thinking with your head and not your heart, then you should wait. ... I would estimate that house prices are going to be at their trough in 2 years

I can't imagine putting part of my life on hold for 2 years but each to their own.

What happens if in 2 years house prices haven't dropped as you'd expected? What does "thinking with your head" suggest you do then, keep waiting? (To give some context, one poster here sold up over ten years ago and has spent the last 10 years convinced prices will crash but of course they never did and now never will drop to the level he needs to have been proven right.)

What happens if he doesn’t sell and 2 years from now prices have dropped 20 percent he’s in negative equity and can’t even get a “good” high interest rate, Meaning he’s completely knackered.

 If I had option of “sitting out” this next couple of years I’d 100% do it