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

MobileSaver

Gycraig said:

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

As the majority of mortgages are for 5 years or more he'd probably just keep paying his mortgage at a great rate for another 3 years, paying down his debt every month and living his life however he wants without having to worry about his parents being in the very next room...

Gycraig

MobileSaver said:

Gycraig said:

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

As the majority of mortgages are for 5 years or more he'd probably just keep paying his mortgage at a great rate for another 3 years, paying down his debt every month and living his life however he wants without having to worry about his parents being in the very next room...

Fair, I wouldn’t wanna tie myself in for 5 years at these interest rates but you raise a fair point. 

I don’t get your obsession with living alone though tbh, plenty of cultures don’t move out until much older than the uk who averages 25 for moving out. Apart from being able to have sex loudly when I want it my lifestyle is exactly the same in my own house as it was living with my wives parents. 

lookstraightahead

Gycraig said:

MobileSaver said:

Gycraig said:

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

As the majority of mortgages are for 5 years or more he'd probably just keep paying his mortgage at a great rate for another 3 years, paying down his debt every month and living his life however he wants without having to worry about his parents being in the very next room...

Fair, I wouldn’t wanna tie myself in for 5 years at these interest rates but you raise a fair point. 

I don’t get your obsession with living alone though tbh, plenty of cultures don’t move out until much older than the uk who averages 25 for moving out. Apart from being able to have sex loudly when I want it my lifestyle is exactly the same in my own house as it was living with my wives parents. 

Hoping that's a typo 😎

MobileSaver

Gycraig said:

MobileSaver said:

Gycraig said:

MobileSaver said:

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

As the majority of mortgages are for 5 years or more he'd probably just keep paying his mortgage at a great rate for another 3 years, paying down his debt every month and living his life however he wants without having to worry about his parents being in the very next room...

the uk who averages 25 for moving out. Apart from being able to have sex loudly when I want it

Exactly. Isn't sex when you want, where you want and how often you want, one of the main things that living life is all about for most people in their 20s and 30s?!?!

Sarah1Mitty2

Gycraig said:

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 ? 

Part of the answer is in the thread title, and I still don`t think you are really engaging with the reality of the affordability changes that have just taken place.

Sarah1Mitty2

Seandlee24 said:

After 5 years living in London, I moved back in with my parents (near Manchester) in order to save the final portion of my deposit.

At present, I have about £40k saved and earn a decent salary, so getting a mortgage for the kind of properties I'm looking at won't be an issue. For a 35-year mortgage, my monthly mortgage will be around £1,200 (approx 35% of take-home pay). 

My main question/concern is, should I continue living at my parents, saving c.£1.5k per month and building a larger deposit whilst I "wait out" the current situation, in the hope that house prices and interest rates begin to drop in the first half of next year, or look to buy a property as soon as one comes up that I like the look of, knowing that I'm potentially overpaying in terms of both prices and potentially interest rates for fixed period? 

Worth saying, I'm looking for answers from a financial viewpoint. There are clearly the obvious social/cultural/expenses benefits and drawbacks of living with parents/moving out - I'm lucky in that I get on relatively well with my parents. 

Thanks in advance!

Have you been shopping around for the best savings rates?

Seandlee24

Sarah1Mitty2 said:

Seandlee24 said:

After 5 years living in London, I moved back in with my parents (near Manchester) in order to save the final portion of my deposit.

At present, I have about £40k saved and earn a decent salary, so getting a mortgage for the kind of properties I'm looking at won't be an issue. For a 35-year mortgage, my monthly mortgage will be around £1,200 (approx 35% of take-home pay). 

My main question/concern is, should I continue living at my parents, saving c.£1.5k per month and building a larger deposit whilst I "wait out" the current situation, in the hope that house prices and interest rates begin to drop in the first half of next year, or look to buy a property as soon as one comes up that I like the look of, knowing that I'm potentially overpaying in terms of both prices and potentially interest rates for fixed period? 

Worth saying, I'm looking for answers from a financial viewpoint. There are clearly the obvious social/cultural/expenses benefits and drawbacks of living with parents/moving out - I'm lucky in that I get on relatively well with my parents. 

Thanks in advance!

Have you been shopping around for the best savings rates?

I recently opened up a Santander savings account, which I believe gives a very competitive rate whilst being able to take money out without much notice (can't quite remember the rate they offer now). Have moved my Monzo savings over to that (about 60% of my savings). Rest tied up in a H2B ISA and a stocks and shares ISA.

Mutton_Geoff

tunde10 said:

35 year mortgage seems like a long time.

Are these properties affordable on a 25 years mortgage? If so and you're ready, i'd move as its a home, not necessarily an investment. 

If you can only just about afford it and on a 35yr mortgage. Best to keep savings and hope house prices stay the same or fall and you'd be in a stronger position with almost 50% more deposit in a years time

Since most people never see out the original term of their mortgage as they move up, down, sideways, merge in marriages etc, the initial term is much less important than affordability. I took my first mortgage out in 1979 and it seemed a massive commitment at the time. Today, a couple of months take home pay could easily clear that original debt.

Since then I moved and remortgaged with new 25 year terms on many occasions so a 35 year initial term is no different to moving onto a new deal 10 years after the first. I do hope interest rates don't go where they did in the 1980s when I had to get a 5 year fix at 15% just to keep my head above water 

Sarah1Mitty2

Seandlee24 said:

Sarah1Mitty2 said:

Seandlee24 said:

After 5 years living in London, I moved back in with my parents (near Manchester) in order to save the final portion of my deposit.

At present, I have about £40k saved and earn a decent salary, so getting a mortgage for the kind of properties I'm looking at won't be an issue. For a 35-year mortgage, my monthly mortgage will be around £1,200 (approx 35% of take-home pay). 

My main question/concern is, should I continue living at my parents, saving c.£1.5k per month and building a larger deposit whilst I "wait out" the current situation, in the hope that house prices and interest rates begin to drop in the first half of next year, or look to buy a property as soon as one comes up that I like the look of, knowing that I'm potentially overpaying in terms of both prices and potentially interest rates for fixed period? 

Worth saying, I'm looking for answers from a financial viewpoint. There are clearly the obvious social/cultural/expenses benefits and drawbacks of living with parents/moving out - I'm lucky in that I get on relatively well with my parents. 

Thanks in advance!

Have you been shopping around for the best savings rates?

I recently opened up a Santander savings account, which I believe gives a very competitive rate whilst being able to take money out without much notice (can't quite remember the rate they offer now). Have moved my Monzo savings over to that (about 60% of my savings). Rest tied up in a H2B ISA and a stocks and shares ISA.

Good move, you should stay aware of the rates though IMO. Marcus is a nice account to use but they tend to drag their feet in passing on rate rises I feel.

Sarah1Mitty2

Mutton_Geoff said:

tunde10 said:

35 year mortgage seems like a long time.

Are these properties affordable on a 25 years mortgage? If so and you're ready, i'd move as its a home, not necessarily an investment. 

If you can only just about afford it and on a 35yr mortgage. Best to keep savings and hope house prices stay the same or fall and you'd be in a stronger position with almost 50% more deposit in a years time

Since most people never see out the original term of their mortgage as they move up, down, sideways, merge in marriages etc, the initial term is much less important than affordability. I took my first mortgage out in 1979 and it seemed a massive commitment at the time. Today, a couple of months take home pay could easily clear that original debt.

Since then I moved and remortgaged with new 25 year terms on many occasions so a 35 year initial term is no different to moving onto a new deal 10 years after the first. I do hope interest rates don't go where they did in the 1980s when I had to get a 5 year fix at 15% just to keep my head above water 

Not sure we will see 15%, but you never know, 8 - 9% as standard maybe?