First time buyers - now a good time?

Merlinpixie

I know nobody can predict the future but having waited many years (I'm 27) in the hope that prices go down, I find myself now in the position of having to move in the next couple of months due to my fiancee getting a new job. Do we buy or rent?

We are first time buyers and need to relocate from Leicester to Brighton\Mid Sussex. We could put down a reasonable deposit of say £50,000 and we both have good steady jobs and so I think getting a mortgage would be ok, I think we would be looking at a house around £250,000 mark.

My question really is should we now wait for 6-12 months whilst things hopefully settle down - i.e. mortgages being witrhdrawn etc or should we bite the bullet and hope that we can knock a fair amount off the asking price?

Of course the costs of renting for a short time again and then moving need to be taken into account.

Any comments would be much appreciated as I feel it would be sods law that having waited for years to buy a house, then urgently needing to buy one that we will then face a massive loss on the house price in the next few years.

What's the general advice for first time buyers at the moment?

izzwizz_2

Regardless of house prices, my advice would be to rent for a while in order to get a feel for the area. This would give you time to have a good look round and decide where you would like to buy.

beingjdc

I think prices will fall, and fall a lot. The only thing I can think of which will stop prices falling is if the Bank of England / Government come up with a way of making mortgages cheap again. Either way, you'll be better off buying later than buying now, either you'll pay less for the house, or you'll get a better mortgage deal.

m00m00

whether they will fall or not (and most sensible people think they will fall by some amount) they will certainly not rise in the short term (<12months). Renting is absolutely the right thing to do when you move to a new area, as it gives you a better idea of the areas in the town/city if you don't know it very well.

Viking_Man

You'll likely be saving money by renting anyway - either that or you'll be able to live in a better house than the one you could buy.

Merlinpixie

Thanks for the comments so far, I should have said that we both come from Sussex originally and have only been in Leicester for 2 years so know the area well. Taking this out of the equation do people still thing renting is the best way forward - I only say this as if we were to rent for a couple of years at around £800 per month which is what you'd pay for what we want then you are looking around £20,000 in rent - therefore perhaps even if house prices drop we'd break even? rather than wasting more money on rent?

m00m00

it depends on how much you'd be paying in interest on a purchase

if the interest portion of a mortgage is > 800 you are losing 'dead money' to the bank at the moment

cells

Merlinpixie wrote: »

Thanks for the comments so far, I should have said that we both come from Sussex originally and have only been in Leicester for 2 years so know the area well. Taking this out of the equation do people still thing renting is the best way forward - I only say this as if we were to rent for a couple of years at around £800 per month which is what you'd pay for what we want then you are looking around £20,000 in rent - therefore perhaps even if house prices drop we'd break even? rather than wasting more money on rent?

if renting for 800pcm is "dead money"

a house costing 250k will have interest of £1200 per month

what is that? "alive money"?

personally in my honest judgement, waiting another 6 months wount kill you by which time it will be clear if we are entering a house price crash or not

jamescredmond

Merlinpixie wrote: »

I know nobody can predict the future but having waited many years (I'm 27) in the hope that prices go down, I find myself now in the position of having to move in the next couple of months due to my fiancee getting a new job. Do we buy or rent?

We are first time buyers and need to relocate from Leicester to Brighton\Mid Sussex. We could put down a reasonable deposit of say £50,000 and we both have good steady jobs and so I think getting a mortgage would be ok, I think we would be looking at a house around £250,000 mark.

My question really is should we now wait for 6-12 months whilst things hopefully settle down - i.e. mortgages being witrhdrawn etc or should we bite the bullet and hope that we can knock a fair amount off the asking price?

Of course the costs of renting for a short time again and then moving need to be taken into account.

Any comments would be much appreciated as I feel it would be sods law that having waited for years to buy a house, then urgently needing to buy one that we will then face a massive loss on the house price in the next few years.

What's the general advice for first time buyers at the moment?

at the risk of sounding like your dad (I'm legally just old enough), DO NOT GO ANYWHERE NEAR THE HOUSING MARKET FOR THE TIME BEING!! Is that shouty enough for you? continue to rent and look at the market 18 months hence.
rent in brighton, then look at your options later.
you'd be absolutely mad to go for purchase now.
plenty of advice that points the same way on this site. go research!!!

beingjdc

Merlinpixie wrote: »

Thanks for the comments so far, I should have said that we both come from Sussex originally and have only been in Leicester for 2 years so know the area well. Taking this out of the equation do people still thing renting is the best way forward - I only say this as if we were to rent for a couple of years at around £800 per month which is what you'd pay for what we want then you are looking around £20,000 in rent - therefore perhaps even if house prices drop we'd break even? rather than wasting more money on rent?

Costs over two years:

Renting; £800 a month. £19,200

Buying (say 200k at 6%); interest £1000 a month - £24,000
Depreciation of the order you described - £20,000

I'll ignore the lawyer and tax costs as you want to buy eventually anyway.

So total cost:

Renting: £19,200
Buying: £44,000

Doesn't look like breaking even to me!

UltraCheap_2

I also recommend waiting, watch the market carefully and pounce on the 30% off housing sale!!

That's what I hope to do at least.

Good luck!