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Are We About To Make A Big Mistake?

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My partner and I (26 and 27) are buying a 3 bedroom semi-detached house in Surrey, within a 40 minute train journey from London for £345k (it was last sold for £130k in 2000 but there has been a two-storey extension since). We actually offered £5k over the asking price in July, which was probably the wrong thing to do but at the time houses were moving so quickly and we knew that we wanted this property straight away. It seems like we might have offered just as prices were peaking.

The house is ideal for us and I can see us living there for the next 10 years so I have no anxieties about the property. I am however becoming increasingly nervous from reading this forum that this is the worst time to buy and if property prices start to crash in the next few months, we will regret this decision for years to come.

We are not buying as an investment, we are buying a home. I would be happy if prices stagnated for the next 10 years but it sounds like everyone here is predicting a crash before the end of the year. We have a 15% deposit on a 30 year mortgage and we will still be able to afford our repayments if interest rates jump up a few percent.

Our mortgage has been approved and we are waiting for the contracts which could be in the next week or two but the more I read these forums, the more I'm getting cold feet.

Is there anyone on here who thinks we are doing the right thing? I'm not looking for sarcastic comments, just honest and helpful advice from people who understand the market better than I do. If we sat and watched house prices fluctuate for the next few years we might never own our own home and we don't want to carry on renting. Are we naïve for wanting to set down and start building a home at this time?

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I don't foresee property prices crashing. The government will do everything possible to prevent it, as too many people (i.e. voters) would end up in significant amounts of negative equity. I've watched the housing market for a decade, waiting for a crash so I could buy. All I've seen is the government propping up property prices and bailing out homeowners and banks, because they have a vested interest in preventing a crash. In the long term they're probably aiming for house prices to stagnate until wages catch up. I'm now looking to buy a house myself - I want to be on the side of the people who are being propped up and bailed out!

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Just my opinion, but here it is.

Prices could rise or fall, I would suggest you take a look at the market and see if the house you are committing to is still good value.

Re: Government supporting the market.

One thing to remember is that the government could not stop house prices falling last time around, they still fell 20% in most areas. This time around the BOE will not be able to lower mortgage rates and the government's already up to it's ass in underwriting first time buyers deposits. With the government running a 7% deficit and cutting front line services there will be no money to support the overvalued housing market.

More importantly this time around the banks are not so leveraged and could easily handle a large property price correction, last time th banks couldn't handle it hence 0.5% base rates QE etc.

Last word, do not rely on the government bailing you or your property value out.

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My partner and I (26 and 27) are buying a 3 bedroom semi-detached house in Surrey, within a 40 minute train journey from London for £345k (it was last sold for £130k in 2000 but there has been a two-storey extension since). We actually offered £5k over the asking price in July, which was probably the wrong thing to do but at the time houses were moving so quickly and we knew that we wanted this property straight away. It seems like we might have offered just as prices were peaking.

The house is ideal for us and I can see us living there for the next 10 years so I have no anxieties about the property. I am however becoming increasingly nervous from reading this forum that this is the worst time to buy and if property prices start to crash in the next few months, we will regret this decision for years to come.

We are not buying as an investment, we are buying a home. I would be happy if prices stagnated for the next 10 years but it sounds like everyone here is predicting a crash before the end of the year. We have a 15% deposit on a 30 year mortgage and we will still be able to afford our repayments if interest rates jump up a few percent.

Our mortgage has been approved and we are waiting for the contracts which could be in the next week or two but the more I read these forums, the more I'm getting cold feet.

Is there anyone on here who thinks we are doing the right thing? I'm not looking for sarcastic comments, just honest and helpful advice from people who understand the market better than I do. If we sat and watched house prices fluctuate for the next few years we might never own our own home and we don't want to carry on renting. Are we naïve for wanting to set down and start building a home at this time?

It's impossible to call this market because it's a) overpriced but B) supported by Government

Over the last ten years I've been right in calling it overpriced but wrong in my failure to anticipate Government support (repeated and extreme)

Just do something which suits your circumstances, then at least you get that benefit

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I don't think you need market guidance. No one has a crystal ball! You are at the edge, you are looking for the push.... I'd say go for it. Worst case there is a market crash, prices drop by 15 or even 20 percent. It you are able to pay your mortgage and don't intend to keep drawing down equity ( hoping for rises), what's the problem? You buy a television and a year later you can definitely buy it for much less... Do you worry?

Bottom line is if you are going to use the house as your home for the foreseeable future, the market matters less... It's if you need to cash in your house to move on, you need to worry about the market.

Sensible people can buy and negotiate the market right. Ask yourself just one question before you buy...Can you sell it? Also in my opinion offers over are just silly... What were you thinking? No, it was just getting desperate and anxious about losing the property that must have led to that... Not that the property was actually worth more!!!

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It's impossible to call this market because it's a) overpriced but B) supported by Government

Over the last ten years I've been right in calling it overpriced but wrong in my failure to anticipate Government support (repeated and extreme)

Just do something which suits your circumstances, then at least you get that benefit

Impossible to call eh.

What you're trying to say is, "We make our own decisions."

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Make sure you do some scenario planning. Can you afford it if interest rates rose to 5%? More? What if one of you can't work for a while due to illness/kids/unemployment? A 30 year mortgage suggests perhaps not.

Houses are undoubtably overpriced, but as others have stated the Govt is doing their very best for keep them propped up. They may not manage it forever though.

My worry about your particular situation is that you might be overpaying for that particular house. Check the rest of the market now, and be prepared to renegotiate if it no longer looks like a good deal.

Ultimately it is up to the two of you. If you have real doubts, pull out. I did this once for a house just before exchange of contracts. A bunch of things began to no longer make sense so despite annoying the seller, the estate agent etc - we pulled out. I don't regret the decision at all, and found a much better place a couple of years later.

Edited by StainlessSteelCat

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My partner and I (26 and 27) are buying a 3 bedroom semi-detached house in Surrey, within a 40 minute train journey from London for £345k (it was last sold for £130k in 2000 but there has been a two-storey extension since). We actually offered £5k over the asking price in July, which was probably the wrong thing to do but at the time houses were moving so quickly and we knew that we wanted this property straight away. It seems like we might have offered just as prices were peaking.

The house is ideal for us and I can see us living there for the next 10 years so I have no anxieties about the property. I am however becoming increasingly nervous from reading this forum that this is the worst time to buy and if property prices start to crash in the next few months, we will regret this decision for years to come.

We are not buying as an investment, we are buying a home. I would be happy if prices stagnated for the next 10 years but it sounds like everyone here is predicting a crash before the end of the year. We have a 15% deposit on a 30 year mortgage and we will still be able to afford our repayments if interest rates jump up a few percent.

Our mortgage has been approved and we are waiting for the contracts which could be in the next week or two but the more I read these forums, the more I'm getting cold feet.

Is there anyone on here who thinks we are doing the right thing? I'm not looking for sarcastic comments, just honest and helpful advice from people who understand the market better than I do. If we sat and watched house prices fluctuate for the next few years we might never own our own home and we don't want to carry on renting. Are we naïve for wanting to set down and start building a home at this time?

what part of surrey is it ?

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The problem is that property prices should crash, but that does not mean they are going to do so any time soon. You could have found this site ten years ago and you'd have taken away the same message that prices were far too high and about to crash. The place you are looking at would have probably been well under £200k then, so it would have been the wrong choice not to buy. It also doesn't mean it is not going to happen now.

I don't see a problem with buying in your case, given that you are buying somewhere that you will be happy with for a reasonably long time.

Affordability is the other major factor, don't buy the house if you will need a mortgage that you won't be able to pay comfortably if interest rates click up a few percent or if you are down to one salary for a while.

Unfortunately, successive governments have built up this boom/bust attitude to housing, so it is difficult to buy in guarantee not losing some paper money at some point. Obviously, there is little consolation if you pay £345k for house which is only worth £275k next year, but if you are keeping it for 10 years anyway there is no reason to think it won't be back higher again by then (or at least that is usually what has happened in the past!)

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This is all my opinion, but the house is over priced or you cant afford it if you need a 30 year mortgage with 15% (£50kish) deposit and low interest rates. Up untill recently 25 year mortgage was enough and more than some people needed. And i assume you are talking s repayment mortgage and not interest only.

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