Is now a good time to buy for FTBs

RelievedSheff

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

Jonboy_1984

I would be cautious about leasehold flats at the moment whilst the new fire safety legislation is worked through by freeholders, as I suspect there will be a lot of section 20 costs that won’t ultimately be reflected in values.

Schwarzwald

RelievedSheff said:

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

I have a 1.4% 2yrs fixed ending end of this year.
lender just informed me that going to variable rate would indeed double my monthly mortgage payments from approx 1,800 to 3,600.
not sure why this is hard to believe?

and i do imagine that an monthly increase of this magnitude >1,500 pcm represents a challenge for many borrowers … 

i think that the next 6-9 months will be quite interesting, i’d expect that many will try to sell in order to avoid the monthly mortgage increase, bur renting at much lower costs isnt guaranteed unless people downsize and also finding a buyer wont be easy as i’d expect that there simply will be more supply than demand.

back to the OP, hard to answer, nobody knows, personally i would wait a few months but then start looking, politics might jump in and change the market dynamics, especially in light of election year.

RelievedSheff

Schwarzwald said:

RelievedSheff said:

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

I have a 1.4% 2yrs fixed ending end of this year.
lender just informed me that going to variable rate would indeed double my monthly mortgage payments from approx 1,800 to 3,600.
not sure why this is hard to believe?

and i do imagine that an monthly increase of this magnitude >1,500 pcm represents a challenge for many borrowers … 

i think that the next 6-9 months will be quite interesting, i’d expect that many will try to sell in order to avoid the monthly mortgage increase, bur renting at much lower costs isnt guaranteed unless people downsize and also finding a buyer wont be easy as i’d expect that there simply will be more supply than demand.

back to the OP, hard to answer, nobody knows, personally i would wait a few months but then start looking, politics might jump in and change the market dynamics, especially in light of election year.

But why would you go onto the SVR when much cheaper options are available? 

You just wouldn't!

johnhenstock

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Of, crashy, crashy…

I don’t have to imagine, we bought at the height of the pandemic for a relatively high price, but still in line with local growth (at postcode level) and similar properties, so definitely not an exaggerated cost.

We also went for a 2 year fix ON PURPOSE, as we were looking to extend and re-mortgage after. Well, that fix is coming to an end in December.

What happened is that in the two years we fixed for, we would’ve paid off £16000 in capital, which, with our initial 10% deposit, means we’ve got about 15% equity ON THE ORIGINAL PRICE.

What also happened is that prices continued to grow and without doing anything (or at least without telling the bank), they valued the house at £30k more than when we bought. Equity is then not 15%, but 20%. Keep in mind, we’re still paying the old, low rate that wouldn’t get you a single bed in the area, while rents for similar properties are in excess of £2200…

But, on top of that, we also invested in a driveway, an extension, loft insulation, garden/patio and so the house is likely to be valued at much, much more, I’m estimating a very conservative £100k extra in this environment, which would cover more than our costs AND add even more value. If you ask me, I’ve got about 35% equity in a home that will likely be worth 30% more than it was 2 years ago.

As for the mortgage? We fixed again on just over 4%, hardly the end of the world. Taking your argument into account, about walking away from a rental, walking where, mate? Also, since you’re a fan of walking away, if I was to “quit” today, I’d walk away with around £150k after costs/expenses if I was to sell at a discount.

What would you walk away with after 2 years of renting?

johnhenstock

Schwarzwald said:

RelievedSheff said:

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

I have a 1.4% 2yrs fixed ending end of this year.
lender just informed me that going to variable rate would indeed double my monthly mortgage payments from approx 1,800 to 3,600.
not sure why this is hard to believe?

and i do imagine that an monthly increase of this magnitude >1,500 pcm represents a challenge for many borrowers … 

i think that the next 6-9 months will be quite interesting, i’d expect that many will try to sell in order to avoid the monthly mortgage increase, bur renting at much lower costs isnt guaranteed unless people downsize and also finding a buyer wont be easy as i’d expect that there simply will be more supply than demand.

back to the OP, hard to answer, nobody knows, personally i would wait a few months but then start looking, politics might jump in and change the market dynamics, especially in light of election year.

Ahm… don’t go on a variable rate, then?

Herzlos

FTB's are always going to get screwed, so you may as well hop onto the ladder and start building equity instead of renting and paying someone elses mortgage. In the short term you may lose out a bit but in the long term house prices always go up.

Up here, there's a lot of upward pressure on smaller houses due to people in larger houses downsizing; we recently got about 10% over asking price on a fairly small house, which prices out a lot of FTBers. But back when I bought it, the BTL landlords were pricing out the FTBers.

If you see something you like and can afford, then go for it.

jimbog

Schwarzwald said:

RelievedSheff said:

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

I have a 1.4% 2yrs fixed ending end of this year.
lender just informed me that going to variable rate would indeed double my monthly mortgage payments from approx 1,800 to 3,600

take a look at some of the fixed rates that are available

Mstty

Bigphil1474 said:

Mstty said:

Wages are also significantly up which negates some of the mortgage increase.

Which will in turn slow down any house price decreases.

A bit of inflation (couple of years) isn't necessarily a bad thing long term.

Some of the population will need to renew mortgages in the next year or so, but should be getting paid more. Conversely those already on a fix at a good rate for a few years have more money to play with due to the higher wages.

It's not all doom and gloom.

If you can afford it buy as soon as you can.

Unfortunately wages aren't significantly up for a lot of people. My wage, and the other few million people who work in the public sector, has 'gone up' by about 4% to maybe 6% this year, so really gone down. (4.2% for me). Around a 20% cut since 2010. A bit of inflation isn't a bad thing, rampant inflation compared to the norm in the UK definitely is, especially given where the inflation came from i.e. essentials like food, energy, fuel. My wage rise this year will just about cover the extra I need to pay on energy when my fix ends in October.

I don't think wage rises will have much impact on house price decreases whilst ever wage rises are below inflation, so pretty much doom and gloom if you have a mortgage and need to find a new deal, or are a first time buyer.

Of course public sector will always trend below private.

However there is little stopping people moving about and into the private sector with albeit possibly less benefits and as good a pension etc. Swings and roundabouts

Iwe were in a smallish market town last night and couldn't get a walk in table for two establishments. It's not all as doom as gloom as everyone suggests.

Some just get preconditioned to the feeling of doom from the constant media and that awful one line "Cost of living crisis" 

A crisis is people dying in their droves through hunger or drought imo. 

As someone else suggested on a recent post the media outlets won't show people that say yeah the mortgage has gone up but we are OK. It will always target the doom.

Mstty

Schwarzwald said:

RelievedSheff said:

Sarah1Mitty2 said:

RelievedSheff said:

Sarah1Mitty2 said:

tbo127 said:

It’s hard to know if you buy and then you’ll regret it a couple of years later. 

Imagine taking the advice to pile in two years ago, and fixing at a super low rate for two years, then coming off that fix now?

Yes imagine having an extra two years worth of equity in your asset. How terrible that would be! 

At double or more the original monthly mortgage payments for many people it is a disaster, but as you said on another thread that no one is struggling with their mortgage it obviously isn`t something that affects you.

Any evidence of these mortgage repayments that are "double or more" the original payment?

Our current contractual repayment is £1194 at 2.34%. Using a rate of 5.3% takes that up to £1330. Hardly a massive rise and less than we currently pay as we overpay the mortgage every month.

I have a 1.4% 2yrs fixed ending end of this year.
lender just informed me that going to variable rate would indeed double my monthly mortgage payments from approx 1,800 to 3,600.
not sure why this is hard to believe?

and i do imagine that an monthly increase of this magnitude >1,500 pcm represents a challenge for many borrowers … 

i think that the next 6-9 months will be quite interesting, i’d expect that many will try to sell in order to avoid the monthly mortgage increase, bur renting at much lower costs isnt guaranteed unless people downsize and also finding a buyer wont be easy as i’d expect that there simply will be more supply than demand.

back to the OP, hard to answer, nobody knows, personally i would wait a few months but then start looking, politics might jump in and change the market dynamics, especially in light of election year.

Anyone that takes out a 2 year fix is imo very short sighted always a 5 year plan. But moving on from that.

Presuming you have a 25 year mortgage. Existing repayments of £1800 at 1.4% means borrowing in the range of £450k. 

It's all relative so although your headline of £1800-£3600 will be scary media click bait in reality to get a mortgage of £450k in the first place you are on a decent salary.

I suspect if the daily mail are reading your post they will be in touch soon (joking I think)

Without extending your mortgage and keeping the existing term (guessing 23 years left) @ 5.25% five year fix which is possible as of today £2875 a month.

Still £1000 more a month but again presumptive but there is over £120k in household income and that's on the low guess side so take home pay over £6,300 whilst nit enjoyable.....doable.