| Question on buying first property (so we're pretty ignorant) 11:03 - May 23 with 2996 views | The_Flashing_Smile |
Is now the worst time ever to buy (as some have been telling us) or is this a bit of an over-reaction? We've found a place we like but some are telling us to wait, as interest rates are so high and a property market crash is coming. But we've heard this before, is anyone ever really sure? I've heard conflicting reports. |  |
| Trust the process. Trust Phil. |
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| Question on buying first property (so we're pretty ignorant) on 11:06 - May 23 with 2334 views | Steve_M |
If you're in the immediate vicinity of London then that crash might still be a long way away. Interest rates are more likely to go up a bit more before coming down again in the medium-term.
If you like somewhere and are confident you can afford it, then get on with it rather than over-thinking it*.
* I am very guilty of overthinking on this subject when it comes to me. |  |
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| Question on buying first property (so we're pretty ignorant) on 11:08 - May 23 with 2323 views | J2BLUE |
| Question on buying first property (so we're pretty ignorant) on 11:06 - May 23 by Steve_M |
If you're in the immediate vicinity of London then that crash might still be a long way away. Interest rates are more likely to go up a bit more before coming down again in the medium-term.
If you like somewhere and are confident you can afford it, then get on with it rather than over-thinking it*.
* I am very guilty of overthinking on this subject when it comes to me. |
Agree with this. If you can afford it now and you want it, try and get a fixed rate for a good few years (if it's a good one, obviously) and get on the ladder. |  |
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| Question on buying first property (so we're pretty ignorant) on 11:09 - May 23 with 2307 views | tractorboy1978 |
Interest rates are only going to go higher in the immediate future.
I think the market is going to slow but any idea prices are going to drop hugely is wrong IMO. Ultimately unless you are looking to flip a property quickly, a house is a 20+ year investment and I take the view you are better getting on the ladder asap. [Post edited 23 May 2022 11:25]
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| Question on buying first property (so we're pretty ignorant) on 11:10 - May 23 with 2293 views | Keno |
Hi Dolls
Nothing is certain on this but there is a theory that with inflation and interest rates rising there could be a fall in house prices, While there may be some truth in that I suspect any fall may be localised and what may actually happen is a stagnation in rising values for a while.
There are some more fundamental issues with the house market and what happens too values may also depend on how may people look to offload buy to lets and whether the government look to support markets with extra stamp duty breaks
One think to consider is that it may well be a mortgage is cheaper than rent so buying your own place could give you a monthly saving which will help go some way to offsetting issues with inflation etc.
Happy to chat it through if you want to PM me |  |
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| Question on buying first property (so we're pretty ignorant) on 11:10 - May 23 with 2292 views | Lord_Lucan |
Dolly
I think it's fair to say that you could have picked a better time - my daughter got a new house recently and just crept in with a good fixed rate prior to the inflation panic.
That said, interest rates still low compared to historic levels - shop around and get the best fixed term you can.
Personally I can't see a crash - especially in London and if you delay and prices and rates rise you will kick yourself. Long term you will always win.
If you have found a place you like and you can afford it then jobs a good'n
****Disclaimer - I am not a property expert and myself and all other posters bar Guthrum tend to post a right load of twaddle. |  |
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| Question on buying first property (so we're pretty ignorant) on 11:12 - May 23 with 2263 views | StokieBlue |
Morning Dollers.
A few things in there are a bit odd:
"interest rates are so high"
Interest rates are still at a historic low (the base rate is currently 1% vs 6% in 2008), if you go back to the 80s they were frequently over 10%. Most mortgage rates are still below 3% which is historically a very good deal. It seems doubtful we will be heading to zero rates again anytime soon.
"property market crash is coming"
This tends to be location specific and has been the prediction for the UK property market since time immortal. In the end if you plan to live in the house for 15 or 20 years it shouldn't really be a concern, even if your capital reduces slightly you're still better off than if you were renting those 15 or 20 years. If you want to flip it then it could be a concern but once again, location would determine that.
SB |  |
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| Question on buying first property (so we're pretty ignorant) on 11:16 - May 23 with 2231 views | giant_stow |
I'm no expert but feel your pain - a big dilemma right now especially.
On the buy now side, the internet is littered with people full of regrets who thought prices were too high and thought they'd wait. I thought I was a mug buying my first place in 2005 - so glad I ignored that internal fear, but that's not to say this moment really might be the peak of peaks.
Everything really does seem to point to trouble this time: Cost of living, rates which could easily double/triple from here and a looming recession.
From what I know, it'll take loads of forced sales for there to be a huge crash and that might be some way away as people still have jobs. Plus those that bought even a couple of years ago now have quite a lot of equity in their houses which might protect them.
I've seen columnists predicting anywhere between a 5% - 20% dip in prices over the next couple of years which sounds a lot, but how much would it cost you to carry on renting in that time? Of course, there could be a heavier dip than that or a full on crash.
I reckon the answer depends on your personal circumstances, job security, career prospects and the nitty gritty of how much a mortgage would cost you, compared to carrying on renting and how badly you want a place of your own.
Good luck fella. |  |
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| Question on buying first property (so we're pretty ignorant) on 11:17 - May 23 with 2207 views | clive_baker |
People have been waiting 10 years for the market to crash, and they're still waiting now having probably missed out on 50% growth since then and a decade of lining a landlords pocket. There's no better time than today to buy a property IMO in a stable economy such as the UK. Every month you make a payment you're paying down some equity. What I would say is prices can fluctuate, but if it's a property you can see yourself sitting tight in for a while it's paper losses. The inflationary pressures will inevitably cool the market down, and possibly we'll see a dip but anyone waiting for a significant 'crash' in property prices might be waiting a while. Just my opinion. |  |
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| Question on buying first property (so we're pretty ignorant) on 11:18 - May 23 with 2184 views | markchips |
| Question on buying first property (so we're pretty ignorant) on 11:06 - May 23 by Steve_M |
If you're in the immediate vicinity of London then that crash might still be a long way away. Interest rates are more likely to go up a bit more before coming down again in the medium-term.
If you like somewhere and are confident you can afford it, then get on with it rather than over-thinking it*.
* I am very guilty of overthinking on this subject when it comes to me. |
I would agree with this. There is a shortage of stock so prices will remain stable because of this.
Through business connections I can tell you there are two small interest rises in July and November 2022 which will slow things down so securing a long term fixed rate now would be good. You should be able to book the rate in advance of taking the mortgage so ask to do this and don't be fobbed off. It is perfectly possible to secure the rate. | | | |
| Question on buying first property (so we're pretty ignorant) on 11:28 - May 23 with 2097 views | itfcjoe |
The best time to buy a property, assuming you have finances and security in place, is always today, the second best time is tomorrow.
Trying to wait for the right time is a mug's game because you'll never get it right - my advice would be as a first time buyer just fix your rate for as long as you can - i.e. 5 years - as that will give you breathing space if anything were to go wrong.
On my first house we fixed at 5.5% for 5 years, and within 6 months it ended up 1-2% - but we could afford it so didn't worry as was cheaper than rent etc......we are now fixed for 10 years at 1.something% and will prob end up on the right side of things this time.
But if you are ready, do it - s long as you can keep up with the payments and want to live in that place long term you'll never regret it |  |
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| Question on buying first property (so we're pretty ignorant) on 11:28 - May 23 with 2089 views | SaleAway |
Couple of things to think about here...
1. People get overly hung up on house prices. If its your home, its value is not something that you can easily realise, as you always need somewhere to live.
2. The most important thing is the affordability of your mortgage. As long as you can continue to pay that, then all is good - so what you should be sure of is that you can fix your rate at something that is reasonable to you.
3. If you're thinking that by waiting you might be able to buy something bigger/better, then be careful, as the only thing that will probably trigger a crash is much higher interest rates, which will lower what you can afford to borrow, so any losses might be eaten up, if you see what I mean.
4. as others have said, people have been predicting a bursting of the UK housing bubble for years, but its not happened, and especially with the current govt in charge, it probably won't - they've propped it up time and again, and I presume will do so again if necessary.
My take on this, is if you can afford to, then bite the bullet. Its almost always better than renting. | |
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| Question on buying first property (so we're pretty ignorant) on 11:34 - May 23 with 2029 views | smithy91 |
| Question on buying first property (so we're pretty ignorant) on 11:09 - May 23 by tractorboy1978 |
Interest rates are only going to go higher in the immediate future.
I think the market is going to slow but any idea prices are going to drop hugely is wrong IMO. Ultimately unless you are looking to flip a property quickly, a house is a 20+ year investment and I take the view you are better getting on the ladder asap. [Post edited 23 May 2022 11:25]
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As someone else now looking to buy, it irks me to see the word investment associated with buying a house. I even see estate agents now marketing the lower priced properties as 'ideal investment property'.
A house should be a home, not an investment for someone to take advantage of someone else's lack of income to purchase their own house. I believe this ideology of property investment is why this countries housing market is f***ed. I wonder how many property investors now regret helping to price their own grandchildren out of the housing market due to their own short term greed...
I am not against renting per se, there are definitely reasonable landlords out there who provide for students or those who actually want temp housing (although in alot of cases they only want it because they cant afford to buy!) |  | | |
| Question on buying first property (so we're pretty ignorant) on 11:38 - May 23 with 1989 views | homer_123 |
The questions you need to ask yourself.
1. Are you buying a home or an investment
2. If it's a home, then really the only thing is affordability and what happens if interest rates increase, can you still afford the repayments? Negative equity is only ever a problem if you 'have' to move - note the word 'have'.
3. If it's an investment, I'm not the person to ask |  |
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| Question on buying first property (so we're pretty ignorant) on 11:38 - May 23 with 1990 views | gordon |
Agree with everything others have said = it's never a good idea to wait if you can afford it, with the following caveats - I wouldn't be going in bold in bidding wars for property at the moment - where I am people were going in as far as 50% over valuation before christmas (this has cooled down now), which is crazy given that the market is surely about to slow down.
I also wouldn't want to be left without a decent reserve of cash at the moment (in case the mix of brexit/food prices/gas prices cause a broader crisis), and would also want to be putting down a decent deposit so that negative equity was very unlikely (this is where the value of the house goes below what you still owe on your mortgage).
But waiting because the market might correct isn't sensible, you're rarely better off renting. |  | | |
| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 with 1945 views | tractorboy1978 |
| Question on buying first property (so we're pretty ignorant) on 11:34 - May 23 by smithy91 |
As someone else now looking to buy, it irks me to see the word investment associated with buying a house. I even see estate agents now marketing the lower priced properties as 'ideal investment property'.
A house should be a home, not an investment for someone to take advantage of someone else's lack of income to purchase their own house. I believe this ideology of property investment is why this countries housing market is f***ed. I wonder how many property investors now regret helping to price their own grandchildren out of the housing market due to their own short term greed...
I am not against renting per se, there are definitely reasonable landlords out there who provide for students or those who actually want temp housing (although in alot of cases they only want it because they cant afford to buy!) |
Your own home is still an investment - ultimately you want to pay your mortgage down and be left with an asset at the end of it that you can leave to your relatives. That's very much in the British psyche/culture. | | | |
| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 with 1943 views | homer_123 |
| Question on buying first property (so we're pretty ignorant) on 11:09 - May 23 by tractorboy1978 |
Interest rates are only going to go higher in the immediate future.
I think the market is going to slow but any idea prices are going to drop hugely is wrong IMO. Ultimately unless you are looking to flip a property quickly, a house is a 20+ year investment and I take the view you are better getting on the ladder asap. [Post edited 23 May 2022 11:25]
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'...a house is a 20+ year investment.' - a small point of order.
A house is a home. Yes, it can be an investment...but if you are there for 20+ years, trust me - it's a home first and foremost. | |
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| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 with 1946 views | factual_blue |
If I downsize....
So you'll be able to buy Chateau des Réalités
Sorted.
Sorted |  |
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| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 with 1946 views | textbackup |
Can’t wait forever for the right time, or you’ll get to 40 and still be renting.
Take the step and get on with it |  |
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| Question on buying first property (so we're pretty ignorant) on 11:47 - May 23 with 1876 views | The_Flashing_Smile |
| Question on buying first property (so we're pretty ignorant) on 11:12 - May 23 by StokieBlue |
Morning Dollers.
A few things in there are a bit odd:
"interest rates are so high"
Interest rates are still at a historic low (the base rate is currently 1% vs 6% in 2008), if you go back to the 80s they were frequently over 10%. Most mortgage rates are still below 3% which is historically a very good deal. It seems doubtful we will be heading to zero rates again anytime soon.
"property market crash is coming"
This tends to be location specific and has been the prediction for the UK property market since time immortal. In the end if you plan to live in the house for 15 or 20 years it shouldn't really be a concern, even if your capital reduces slightly you're still better off than if you were renting those 15 or 20 years. If you want to flip it then it could be a concern but once again, location would determine that.
SB |
Cheers, and good to see you back Stokers! | |
| Trust the process. Trust Phil. |
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| Question on buying first property (so we're pretty ignorant) on 11:47 - May 23 with 1876 views | smithy91 |
| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 by tractorboy1978 |
Your own home is still an investment - ultimately you want to pay your mortgage down and be left with an asset at the end of it that you can leave to your relatives. That's very much in the British psyche/culture. |
You arent cashing in on your own home when you are dead, its something your family will cash in to benefit their own funds. Nothing against that at all- although i suspect ineheritance is not helping the gap between the have and have nots right now.
Multiple property owners are the issue, squeezing the availability of affordable housing for their own buy to let gains.
If people want to invest to speculate, maybe think of investing in something that isnt considered by many a basic need in life. Classic cars, stocks, start a business. The sooner property portfolios are seen as predatory, the better imo. Renting has become a far too acceptable way of living. [Post edited 23 May 2022 11:51]
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| Question on buying first property (so we're pretty ignorant) on 11:50 - May 23 with 1844 views | tractorboy1978 |
| Question on buying first property (so we're pretty ignorant) on 11:42 - May 23 by homer_123 |
'...a house is a 20+ year investment.' - a small point of order.
A house is a home. Yes, it can be an investment...but if you are there for 20+ years, trust me - it's a home first and foremost. |
That goes without saying. Purchasing a home is an investment in you and your family's future though, of course it is, and not just financially. | | | |
| Question on buying first property (so we're pretty ignorant) on 11:54 - May 23 with 1826 views | The_Flashing_Smile |
Cheers for the advice everyone, all good stuff! | |
| Trust the process. Trust Phil. |
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| Question on buying first property (so we're pretty ignorant) on 11:54 - May 23 with 1819 views | ElephantintheRoom |
There is an element of truth in the doom mongers forecasts in that interest rates are so low that any increase is proportionally quite high to what you actually pay - but in all honesty the same argument applies to rentals - they won’t go down when interest rates go up. You could fix a mortgage - but that’s really another mechanism for lenders to make more money from you . The key is not to overreach yourself as any problems you’ll have to fix yourself - and furnish the place too. More important is to go to your chosen property at different times of day. If you’ve got screaming kids on trampolines nearby, parking issues or a rat run the warm glow will soon fade | |
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| Question on buying first property (so we're pretty ignorant) on 21:27 - May 23 with 1255 views | WicklowBlue |
Some good advice in this thread Dollars! Let me add my 2 cents/pence from an Irish perspective.
Ultimately if it is cheaper to pay a mortgage than rent the same property then you buy!
- Property is an asset that you own and can inject value into. Renting is lost money you don't own it.
- Do think long term, is the property going to suit you over 10+ years. Dare I say consider kids etc? Buy a place you can see yourself living in for a decade or more.
- Stress test your finances, if interest rates increase X amount over 5 years what does that look like?
- Now is a great time to fix with interest rates on the rise.
- Keep some cash in reserve as a buffer, don't got all out drain your reserves.
- What are your job prospects like? Over the years ahead do you see a path to increasing your earnings above inflation?
If helps here is my experience: (also my ask to Gav would be a rich text editor  )
- I bought at the top of the peak in 2008 in Ireland. Prices were nuts!!! 100% mortgage approved and then withdrawn from the bank. (Keep the LTV as low as possible) The bank withdrawing saved me...
- During the crash things were super tough had to renegotiate some personal loans and credit cards. Impacted my credit score but I had a house over my head that was the priority.
- The value of my house in 2009 was below half of what I paid for it. Absolutely sickening and negative equity was crazy over here. However over the years I'm now in positive equity. Once again showing property is a long term investment.
The property market in Ireland is again nuts( has been for my 47 years old n this planet). Rents are through the roof, simple economics is supply versus demand.
Askaboutmoney.com (no affiliation) a fabulous site over here in Eire. Check out others in the UK.
In short as others have said, if you can buy something that works for you for 10+ years go for it! |  | | |
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