is now a good time to buy a home or do you think they’ll be a correction?

15 comments

1. The market will not crash.

   It can’t, the banks would fail and the government would not allow that to happen.

2. A colleague used to say this about 15 years ago, and has since been massively priced out of the market because of vacillating. Due to the shortage of new housing and the preponderance of landlords owning many properties, the so-called correction may never come. Unless you are buying a house as an investment, the best time to buy is always now.

3. The market won’t be “correcting” itself. Stagnating yes. But not dropping price-wise. Inflation is going through the roof plus there is constant shortage of properties. Prices will continue growing.

4. I don’t think so. A crash would be catastrophic (it would wipe out homeowners’ equity, among other things) so the government will do everything it could to avoid one.

5. The best time to buy a house was yesterday – the second best time to buy a house is now.

6. I used to work in agency and so many times I thought “this can’t go on” and it would collapse but even with things like the pandemic and major National issues like Brexit they just keep going up. Part of the issue is that so much of the economy is resting on mortgage debt, if the housing market were to crash it would literally pull everything else into a black hole with it. Now I’m a big fan of property being a necessity not a commodity but I don’t think a correction would be good for anyone – at least not a sharp one.

   Ultimately the housing market operates on supply and demand and as you pointed out there are 4-5 viewings per house and nothing is on the market for long which shows very high demand supporting current prices and probably prices continuing to rise. There is also the fact that while new homes are being built, there are pitifully few compared to the number that are needed – by scarcity drives a higher price so developers make a profit and vendors can sell on and upgrade.

   The current financial paradigm will probably not change that as people who are well off enough to be considering saving to buy a property will simply consume fewer luxuries and cancel memberships to bridge the gap and ensure their savings goals are maintained or increased to keep up with inflation and price increases. Some will drop out of the race for a while or permanently of course as they’re priced out, or they will move to cheaper locations.

   The bubble has to continue because too many people have too much to lose and that is (partly, not entirely) down to housing being commodified by Margaret Thatchers policies in the 1980s.

   I don’t think the government would let the market collapse to the point where you’re in negative equity, but if that’s a concern then what I would do is increase your deposit and lower your expectations to buy somewhere smaller or cheaper to make your mortgage payments lower, that way if interest rates bump or things get rocky you have some wiggle room and you’re not stacked up to your eyes with nowhere to go – that’s how people lose properties.

   Also consider Freehold over Leasehold if possible because Leasehold will come with service charges and ground rent payments on top of your mortgage, Council tax, gas, electricity, water, and ongoing maintenance costs.

   Ill finish this incoherent rambling that hasn’t really answered your question but hopefully given some food for thought with a great quote which I think is often attributed to Mark Twain – “buy land; they’re not making it anymore”

7. I don’t think it will crash but it will stabilise and possibly slightly lower. Our financial advisor is also a mortgage advisor. We saw him last week and he said now is a really bad time to buy a house. However, he also said interest rates for mortgages are certainly rising over the next couple of years, so there’s that too!

8. I think prices will go down, but I would still buy in the next year or so because they won’t go down by a huge amount and you’ll have the price stability that ownership brings.

9. We said that 20 years ago and are still renting.

10. My old man sold his semi detached in Wood Green in ‘88 because he fell for the agent telling him the market was topping out. Sold for £64k then, recently went for over a million.

    It might slow, it may even reverse a tiny amount but you’re talking low single digits. There’ll never be some great reckoning that takes property back to what it’s actually worth.

11. Ultimately, the U.K. is not building houses in any great quantity, so the demand for homes is only going to go up. I’d suggest that means sectors/areas might plateau, but ultimately there can’t be a huge drop in price because there isn’t enough new product entering the market to offset demand.

    In short, I don’t exactly any market ‘correction’ of significant.

12. When my husband and I bought our house (in the early 2000s) the market was just starting to take off and we realised that if we didn’t buy very soon we’d probably never be able to afford to. In the 12 months we prevaricated the very nice little detached houses that we’d been initially looking at went right out of our reach and we finished up buying something a lot smaller than we’d initially intended. I realise, given what’s happened with the market we were actually pretty lucky. We make reasonable money between us but the thought of having to repay a mortgage of hundreds of thousands terrifies me. I see people who are spending 50% of their income on housing costs (we pay a chunk less than10%) and I don’t like the idea of downgrading our living standards just to live somewhere different.

    This got a bit rambly but my point is don’t wait for a future that will most likely not happen if you’re in a position to buy now. Get on the ladder and start repaying that loan. The chances are that in a few years you’ll be patting yourself on the back and deeply grateful that you don’t have to lay out a far larger chunk of your income for housing than you already do. The evidence of many years of recent history indicates that property will only get more expensive and unobtainable to even more levels of society.

    It also hasn’t escaped my notice that although as I said in modern terms our mortgage is pretty insubstantial, its actually a great deal more than my parents borrowed at any time in their lives – for houses a great deal bigger than the one I currently live in.

13. It’s likely to stagnate at some point. Perhaps due to an increase in interest rates but even when that happens, the cash buyers investing in properties to rent out will still be snapping them up. It’s wild.

    My fiancé and are are in the process of buying our first home and prices continued to rise throughout the viewing stage it’s been insane. I’m grateful we managed to get one whilst we still have a 15% deposit for houses in the area.

14. I used to think there will be a correction. I now realise I will be renting for the rest of my life.

    Someone pointed out to me that even if there is a correction that made any real difference it would be bad for your average first the buyer anyway as the availability of mortgages would be wiped out by reluctant lenders. The only people to benefit from a large correction would be cash buyers.

15. I bought a house in June last year that has gone up by 10% in less than a year.
    Had I waited 6 months I wouldn’t have been able to buy the house.