House prices… buy now or wait it out?

Gut feel is that you won’t lose out in your position over the winter.

Keep looking, if you find a dream house, buy it but I can’t see much rising price action in this market.

I doubt we'll see significant price drops, unless your area was particularly overheated?

I'd be keeping an eye out but no great urgency as prices are likely to plateau for a year or so IMO.

Work out how often the type of house you actually want to buy comes onto the market. If it's not often and you can afford it why miss out on your ideal house in the hope you could save a bit of money?

Think the real bow wave of price drops will be when you get the people coming out of fixed rate deals in 12-18 months. Into a market where a good number of people are already trying to sell and no one can get a new mortgage deal that they can afford... certainly going to be a fun couple of years.

The housing market has been super inflated and un sustainable for the last few years, 10 x average wage for an average 3 bed semi.

I see a correction same as the late 80s earlier 90s I'm expecting to lose at least a 1/3 off the cost of my home, but it's all monopoly money until you need to sell up and fund retirement care home fees.

The only difference now and then is that there is a vast amount of people who see property as a gold plated investment and still have disposable income or cash and will buy property and just pass the cost onto Tennant's.

Saying that we all want somewhere nice to live in the OP's position if you see something you like buy it, live is too short.

Nobody knows.

Rent will be around £2k a month will house prices drop more than that?

It's very hard to time any market, housing market,stock market etc.

I don't think there will be many 'forced' sales, so I think prices will be flat for a few years or maybe drop slightly.

With both those things in mind and the fact that you are 'losing' a grand or two per month (presumably) whilst you are renting, if what you want comes on the market I would just buy it.

As above, who knows? Worst case, the "average" price of an "average " house may plateau or even drop slightly if enough "average" people need to move and there's lots in the market. The exceptional properties will still be in high demand by people welll placed to buy.

Saying that we all want somewhere nice to live in the OP’s position if you see something you like buy it, live is too short.

At the end of the day, this +1.

Unless house prices absolutely crumble, then if you're mortgage free is any potential saving ever going to be worth sub-optimalness of renting? It's unlikely to be a big enough crash that your money is suddenly going to buy a 6 bed farmhouse rather than suburban semi (or whatever your budget is).

And with the £ nosediving there will be foreign investors looking for bargains too.

Just wait for the perfect house and buy. You are in effect swapping your old house for the new one so the market doesn't really matter*

*OK there is the possibility that you have timed everything perfectly and the market drops by 30% before you buy your new house- You would be daft to pass up a house you love in the hope that this happens imo.

It depends where you want to live currently seeing prices fluctuate in areas no one wants to live but prime areas not much change other than less property's on the market. There will be the odd bargain but things are certainly not that bad yet, If your buying a family home then you're clearly wasting money renting which you can never get back.

CTK market drops by 30% we need a few more houses in the country before that happens but I could be wrong.

To build on zip's comment - will price falls be fully or partially offset by rent payments?
Housing market is softening; add in possible change of policy by chancellor and/or BoE, global economy, Ukraine - who knows where market is going?
If it was me I would start house hunting now and use a broker to agree small mortgage in principle.
Negotiate hard on any possible properties; check out sale history and find out what you can about vendors' circumstances.
If you intend this to be your 'forever' house and given your financial circumstances I wouldn't be too bothered about price falls - unless you expect a housing crash.

In answer to your specific question, if it were me I would be looking for the ideal house for your circumstances and not try to guess the market. If you wait it out you might miss a gem.

We have had our house in the market for about 6 weeks. Very little interest, and I’ve noticed the prices in our area have probably fallen 10%.

I think the market will fall quite a bit as buyers will be few and far between and their buying power will be diminished due to interest rates increasing.

Have you considered a Canal boat..?

I would certainly wait until after xmas. Seeing plenty of 5-10% asking price reductions and even some 20%. Plus there is a lot more on the market now and a fair few people are dropping the asking price within 6-8 weeks of listing which that tells me they are having no interest at all. Obviously this is gonna be dependant on where you want to live - I am in Buckinghamshire so traditionally a very buoyant market. Plus BoE will be announcing more base rate hikes which will only improve things.

It’s never the wrong time to buy the right house.

Sage advice as always!
Pretty much what I am thinking
The main reason for not buying yet, has been down to not finding anything we want, so may still take some time yet.

The main change down here, is a slowing down, of both properties coming to market and the speed they are selling.

A few months ago, most properties were sold for well over asking price, within days of being listed.

Looks like there is a slight potential to make offers below asking price now, although asking prices are still inflated.

Just need the right house to turn up at a sensible price and we’d buy now

Just need the right house to turn up at a sensible price and we’d buy now

Good plan, no need to rush and no reason to turn down the chance of the right house if it comes up for sale. IMO house prices only nose dive when people are forced to sell & given the bouyant rental market I can see people renting rather than selling up and seeing a paper loss.

You're obviously in a great position. Having just painfully renewed my mortgage, I suspect there will be a lot of people who find they can't do the house 'upgrade' they want to just now - either because it's now unaffordable with rising mortgage costs, or just 'not sensible' in light of cost of living crisis. So in the mid-high end of the market, I'd expect houses to be selling very slowly indeed. Presumably this means you can negotiate a discount if the seller really needs to sell.

I'm not convinced that things will change too much in the coming months, unless the cost of living really bites and sees people having to down-size in order to eat.

IANA financial forecaster.

I expect they will drop by whatever the increase in mortgage rates has been.. ie if a 200k mortgage used to cost £700 a month and now a £170k mortgage costs that, I'd estimate a 15% drop. It will possibly overshoot that if there's a recession, but the overshoot will be quite short lived.

I would also keep looking, but if you find something be prepared to be very cheeky with a price offer. You're extremely unlikely to time the market perfectly, there's people on housepricecrash who didn't buy in 2009 (as they thought they had further to drop) and still haven't bought now.

New housing development near us has just bumped a £495k house up to £550k this week

ie if a 200k mortgage used to cost £700 a month and now a £170k mortgage costs that, I’d estimate a 15% drop.

By that logic anyone (as I did recently) going from a 1.75% to ~ 5% mortgage would actually need to a ~20% reduction in the house prices - I.e. the £300k house becomes £240k.

*Representative example: £300k house with a £200k mortgage, 25 year term.

By that logic anyone (as I did recently) going from a 1.75% to ~ 5% mortgage would actually need to a ~20% reduction in the house prices – I.e. the £300k house becomes £240k.

I think at the first time buyer end of the market that may be close to correct, unless other changes (subsidies, tax etc) come out. At the higher end of the market the percent of the price covered by a mortgage is smaller (the rest is normally equity) so they may be less affected?

So as with most things like this I'm now of the view. Pay what you are happy to pay, stop looking at prices and enjoy the purchase.

Now the numbers are bigger with houses but as your not so affected by mortgage rates I'd just buy what you want and get on with life.
Put it another way how much would you pay for an easier purchase without constant market watching etc?

So as with most things like this I’m now of the view. Pay what you are happy to pay, stop looking at prices and enjoy the purchase.

Now the numbers are bigger with houses but as your not so affected by mortgage rates I’d just buy what you want and get on with life.
Put it another way how much would you pay for an easier purchase without constant market watching etc?

I feel that many people are not quite appreciating the paradigm shift that has taken place in the money markets in the past year (and even more so in the past two months). Interest rates are back to levels not seen for two entire decades, and not only that but the overall trend is now up for the first time in half a century.

Demand is not the quantity of buyers in the marketplace, it's what the buyers are able to bid at any given price. As other posters have pointed out above, that number has absolutely cratered in the past couple of months, and it will continue to do so. At this point there will still be quite a few cash buyers in a similar situation to the OP who are just deploying a lump sum from selling their house during the past year or two. Once that money has been spent (say after xmas) then it becomes a buyer's market.

Sentiment has not properly turned yet but once that happens then it will work in the opposite way to what we saw during the covid boom - people will be desperate to sell before prices and demand drop further. 10% off 400 grand is 40k, why an earth would you not wait a couple of months for 40k? That is a very nice buffer to have in your back pocket for no effort at all.

We just moved at the end of September there, and to a certain point I worry about a crash. But it actually doesn't matter much as we are here to stay for quite some time. New houses on this development have popped up for sale recently as they near completion and they seem to have a gone up a little bit! We have lots of equity in the house so we are very fortunate. We had a very stressful, but very short purchase and we are very happy here even after only 3 weeks. I'd say go for it if it the right house for you and you plan to stay put for a while.

10% off 400 grand is 40k, why an earth would you not wait a couple of months for 40k? That is a very nice buffer to have in your back pocket for no effort at all.

Depends how you view a house.

• Cash machine - yes, wait for the crash and then buy.
• To live in as a home. Somewhere that feels right and you'd be happy to stay in for many years.

The right house for the OP may pop up on Rightmove today.

I know a few people trying to move at the moment, there are some fairly fragile chains at the moment as people get cold feet feeling like they've overpaid, or alternatively desperate to complete before their mortgage offer expires and costs rocket.

where I am the market has come to a screeching halt. this time last year it was offers over, 20-30 viewings on the day places when on the market. now? barely anything is moving. house down the road from me has steadily dropped from £250k>£220k in a month. I think it'll drop more before it sells.

Depends how you view a house.

• Cash machine – yes, wait for the crash and then buy.
• To live in as a home. Somewhere that feels right and you’d be happy to stay in for many years.

The right house for the OP may pop up on Rightmove today.

Well yes, I do disagree with this idea a 'forever home' or the perfect house. Not saying that I would be happy to live anywhere but there's a lot more than one decent house out there. None of the 200+ residents of my village are terminally depressed because they are stuck in a particular house (as far as I know) - all have got their own positives and negatives. Plus, if you see somewhere that much better in a few years time then you just move.

Depends on where you are looking, and for what kind of property. The current crisis is going to rip through the buy to let sector first, and then spread from there. I think the last couple of generations has never experienced a proper house price 'correction', and there is still the orthodoxy that prices will keep rising, so much so that a lot of people factor in dependable increases into their personal financial equation, drawing down cash from property value etc.

And we have to remember this isn't just an interest rate issue, there are multiple pressures on a lot of houseowners which could force a sale or cause a default. It is these which cause the most significant downward pressure on prices.

I see a correction same as the late 80s earlier 90s I’m expecting to lose at least a 1/3 off the cost of my home,

I'm too young to have been looking at the housing market then, but did they really loose 1/3 of their prices across the board? As you constantly hear of boom and bust but I've never heard of anyone really making serious savings in the housing market (unless your a developer).

I’m too young to have been looking at the housing market then, but did they really loose 1/3 of their prices across the board?

Some lost a lot, but my main recollection is a market that stagnated. Properties sat on the market for years, not just months.

We bought our first house in 1990 for £52k, sold it seven years later for £53k! And that was after fully modernising it. 🙂

The days of flipping for a quick profit may be over for a while (at least for the hobby developer).

Depends how you view a house.

• Cash machine – yes, wait for the crash and then buy.
• To live in as a home. Somewhere that feels right and you’d be happy to stay in for many years.

Either way though, the hypothetical £40k is still £40k? Even if I’m staying out in a house, I’d still rather save that much cash.

I remember prices tanking after 2008. I had a friend who bought a new build for £210k which we all thought was mental for what it was but that's where the market was. About 6 months later other houses on his street were selling for £140k. Houses in the estate I grew up in were going for almost £200k (end terrace 50's house) and they still aren't back to that level since.

Either way though, the hypothetical £40k is still £40k?

yes and no. If it takes a year for prices to drop that much, you've probably spent close to £25k in rent (for a £400k house), and probably lived somewhere thats not really what you want for that time (its harder for a short term rental house to feel like "home"), and there's a chance you'll have to move twice (£2k?). Add to that, right now you're in a buyers market, especially as a no-chain cash buyer, so you may be able to negociate a reasonable discount, vs in a year when the markets bottomed out, you might find more competition. buying now may well not "cost" you anything at all..?

I remember prices tanking after 2008. I had a friend who bought a new build for £210k which we all thought was mental for what it was but that’s where the market was. About 6 months later other houses on his street were selling for £140k. Houses in the estate I grew up in were going for almost £200k (end terrace 50’s house) and they still aren’t back to that level since.

in comparison I bought in early 2008 (absolute peak) in Brighton, for a pretty similar price (£214k from memory). Prices dropped and I bricked it. Prices were back to level within 3 years and I eventually sold it in 2018 for £345k, if I had it today it'd be worth £400k+.

Prices can def drop, and in some areas that will be fairly terminal, but in other areas it will barely be a blip. There's no easy way of telling what will happen to you..

I would be buying unless you only intend to live in it for less than 5 years for the following years

If your in it for the long term then any short term market movement doesn’t matter, house prices always go up in the medium to long term

The rental market price rises make purchase price rises look sensible. We have a house we rent that has gone from £650 to £800/ month since the end of lockdown 1. It really is bonkers, great for us but I wouldnt want to be a tenant at the moment

It really is bonkers, great for us but I wouldnt want to be a tenant at the moment

+1 son & gf are looking to rent, 1st place went for more than asking price & 12months rent in advance, 2nd place wouldn't accept him as he didn't earn more than £39k, luckily they can still live at home and keep stuffing money into the house deposit fund.

1st place went for more than asking price & 12months rent in advance

That's insane, I rented a place about 15 years ago and negociated a rent DISCOUNT for paying a year up front.

I can't see these types of shennanigans lasting in the current climate...?

Rents have indeed gone up way more than inflation, like 40% in sw London this year. They stagnated during covid, bumbled along then this year suddenly shot up.

I bought in late 80s, negative equity really hurts when u r struggling to pay high interest rates. Early 90s was increasing unemployment that caused repos. I got by, by keeping a decent job, renting a spare room and a few side hussles, buying and selling bikes and gardening on a Saturday. Things were a bit grim and a few mates lost their houses.

Current house prices even if they fall 20% will only hit pre covid levels, so still stupidly high. Some sectors are q robust, like bungalows in retirement areas, as buyers are downgrading, and not many bungalows are being built.

I can’t see these types of shennanigans lasting in the current climate…?

Likely to get worse in places / houses people want to live in.

yes and no. If it takes a year for prices to drop that much, you’ve probably spent close to £25k in rent (for a £400k house)

but if you can buy a 400k house mortgage free you have presumably 420k in the bank (stamp duty and moving costs added).

Even the quickest search suggests 2.5% instant access savings account will give you over 10k a year interest. Fine, depends on you tax situation how much if that you lose, but it still soaks up some of the money lost to rent.

Just make sure you don't spend the money in your bank account on:

Enduro Bike
Gravel Bike
Road Bike

Enduro Holiday
Gravel Holiday
Road Holiday

Enduro Coaching
Road Coaching

Very easy to drop 50k without realising and for the market to make no sense whatsoever. Pretty sure there are a hoard of US PE types that sold on a high in the middle of Covid itching to buy UK housing should it drop 20-30%.

Head on over to HousePriceCrash to see guys who've been waiting decades for house prices to drop.....

As others have said, life is too short, if youve got the cash in the bank to buy a house (presumably your forever house) just do it. Use the cash constructively and save on rent. If youve got the cash, who cares what the mortgage rates are.

Right now inflation is eating away at your savings, and interest rates are a fraction of the inflation rate.

I hope in the meantime youve got it spread out over many banks below the FSCS compensation limit of £85k in case a bank goes bust in the meantime. Also hope there isnt a bank 'bail in' in the meatnime.

Summary, TL:DR - JFDI.