Buying a house: collective wisdom required

tony99

Long story short, close family member wants to buy first house,. Nothing spectacular, just a small terraced in NW, and has a decent deposit and no problems getting a mortgage.

But they're not desperate to purchase just yet, but can do if it's the right time. So the question is: Would now be the best time to buy, or is there potential for a price fall in near future; will the election outcome have a knock on effect on the market?

What say you FBers?

S56035

We've delayed a number of times and have now been priced out of where we originally wanted.  I'd say just go for it as in the long run it seems you'll get further behind if you don't.

Johnnyseven

If they wait for 'the right time to buy' they'll never buy a house.

WezV

Let's say there is a crash soon.   Based on the last 2 it will take 8-10 years for the average price to get back to what it was, but it will recover a big chunk of that value within a couple of years.   They will also be building equity back from the mortgage payments paid in that time.

So worse case is likely a couple of years of negative equity, and that's only an problem if looking to sell or remortgage.

Buying a property is rarely a gamble.  The gamble is how long to fix that mortgage for.

blobb

Market is stagnant at the moment. There was movement around Covid when the last of the low interest deals were available, since then it's slowed down. With a change in government I suspect it will start moving again but rates won't drop a lot. When it moves prices will go up. You might get better choice though, I know a few people who have taken theirs off the market and done some work on them instead, they will want this investment back.  As above, if you wait for the right time you'll never buy.

sev112

But even in that case, with land / property they can afford to buy further up the ladder at a cheaper price at a quicker point in time, with a smaller mortgage on the larger property, so when they go back up again they will have a greater value

swiller

More important than the house, is the loan in todays market. Better than chucking money down the drain in rent for sure, get in there. Id be looking for exit terms on the mortgage in case interest rates fall, which could mean hundreds a month saving. Needs to be flexible and cheap to change. Id still go fixed in todays market though.

Ozzie744

In my limited experience and just from hearing stories from others.....There is never going to be the perfect time. Sure, prices may go down in the near future, but they could also go in the opposite direction. If the buyer feels ready and is confident they can get all the banking worked out and meet the payment each month, then I say go for it now. 
One thing about real estate, it is rarely a bad investment and your property appreciates over time.

RaymondLin

If you can buy it today, you buy it today.  Even if it crash tomorrow, so what, you still have a house to live in.  Unless you are buying it to make money in the short term, the fact that the market crashes is not really of any significance to you as long as you can afford a place to live.

Kittyfrisk

Stop looking at a house purchase as a future financial investment that will appreciate, look at it as buying a place to live that you can (hopefully) afford, thus giving some longer term stability.

VimFuego

buy now, it's than just a financial investment, it's a home. And it's folly trying to time the market with investing, it's batshit crazy to try and time it with something important like a home. You only lose or gain value on an asset when you sell, assuming they don't plan to sell anytime soon then any potential value the lose will be recouped with time (as has already been said).

TTony

Should have bought 10 years ago

VimFuego

TTony said:

Should have bought 10 years ago

I like to regale my younger colleagues with tales and stories about how much easier it was to buy a house back in the day. I think they appreciate it. 

Kittyfrisk

VimFuego said:

TTony said:

Should have bought 10 years ago

I like to regale my younger colleagues with tales and stories about how much easier it was to buy a house back in the day. I think they appreciate it. 

Yep, Tales from Old Gregg always go down well :-D

VimFuego

Kittyfrisk said:

VimFuego said:

TTony said:

Should have bought 10 years ago

I like to regale my younger colleagues with tales and stories about how much easier it was to buy a house back in the day. I think they appreciate it. 

Yep, Tales from Old Gregg always go down well :-D

they've given me a very affectionate nickname of boomer and seem to think I'm having loads of sex and they keep telling me I should go away and do it.

Rob1742

I collect houses and I would buy right now. 

boogieman

There’s talk from the tories about reducing stamp duty if they win the election. If they somehow do scrape back in, all I can see happening is the interest generated by low stamp duty rates will stimulate demand for houses, which will then push prices up. So you’d be in exactly the same position, or possibly even worse off. Sod it, I’d buy now. 

joeW

I’d stick a few lower bids in and see if there are any takers.  If it’s their only house, then owning it would be market neutral - if things drop they could possibly afford to upgrade if they go up, who cares they are sorted.  Your primary home is not a great asset to time.  

guitars4you

If they have the deposit and can afford monthly payments then go for it now

My house is paid for now - Brought it about 24 years ago - The most expensive monthly payments was the first 5 years with a fixed deal- When we came out of that the % rate had come down - So I kept the monthly payment as was and created a surplus hence early settlement 

It is to long a project to try and work out when the best time is to buy

Go for it now 

Lodious

I’d concentrate on getting a house you like and are likely stay in. If you get somewhere you love living in and house prices fall, you are fine, because you can stay there and ride it out. If you buy any house to get on the ladder and you hate living there, if house prices drop you are stuffed on all fronts. 

CavemanGrogg

Kittyfrisk said:

Stop looking at a house purchase as a future financial investment that will appreciate, look at it as buying a place to live that you can (hopefully) afford, thus giving some longer term stability.

You can't look at property this way anymore, especially in countries like the UK, it's just far far too expensive to look at it like that, and I don't just mean the price of the property, and things like maintenance, upkeep, and renovating the property.  I mean the costs involved in purchasing the property, the legal fees, surveyors, stamp duty, insurance, and how it's paid for - both the interest costs as well as how long the average person will take pay off their mortgage, it's not just the biggest financial decision most people will make in their lives, it's also signing up for paying off a debt for most of your life, it's a huge commitment.  You're all but committing to live in a property for the rest of your life and all that that entails - from where you can work to where you kids will be educated even where you will be socialising and with whom.