House Price Advice

by Readers Question

9:56 AM, 24th June 2014
About 4 years ago

House Price Advice

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House Price Advice

I’m in the process of buying a property as my main residence and I’m getting jitters about the market. I’d be very interested in your views. House Price Advice

Dear Property118,

I have a pressing question that I’d like your views on.

When the market began to rise in Manchester I was ready to purchase with no onward chain as I’d let my previous home. I moved swiftly but the market was stifled with very few properties for sale and a lot of buyers – prices were rising. Despite this, my opportunism and persistence have paid off and I am currently proceeding with a house purchase. The offer was accepted at the end of April and were looking towards moving over the summer. We’re now in June and many more properties are available. I understand from the press and gut feel that MMR and reduction of pent up demand in the system are now slowing house price rises (even in London!!!). It seems to me that asking prices of new to market houses have fallen and that many prices have been reduced to sell once on the market.

Now I’m no estate agent but I’m starting to wonder if I’m about to pay! say £10k (5.5%) over the odds for the property. I’m very happy with it in every other sense and I really don’t want to mess anyone around but if the market has fallen I’m struggling to see why I should take the hit. If I walk away I have nowhere else to move to so would be starting again with no guarantee that I’ll get anything better but £10k takes a long time to earn and even longer to pay off! I’d also be writing off mortgage application fees and some legal and search fees too.

In short, I’m looking for constructive suggestions from the collective Property118 brain. I may even show the other party your responses in any ensuing negotiation so it’d be great if you could look at options on both sides in your replies. Any negotiation is always best if all parties can walk away feeling good about it.

Many thanks in advance for your help.

Andy G



Comments

Mark Alexander

10:09 AM, 24th June 2014
About 4 years ago

"Gazunder" - see Oxford English Dictionary >>> http://www.oxforddictionaries.com/definition/english/gazunder

and this 2008 article in The Guardian >>> http://www.theguardian.com/money/2008/apr/12/property.houseprices3
.

Adam Hosker

17:14 PM, 24th June 2014
About 4 years ago

That is the risk you take when entering into "any" market; you perhaps should be thinking long term and not short term. House prices may go up or down; unless your a golfing buddy of Mark Carney your not going to know.

As Mark says; you can gazunder them and offer a lower asking price but someone may gazump you tomorrow by offering more.

Unless vendor has same opinion as you; that is dropping. They may turn you down! and you have wasted your time and perhaps finance costs too.

Land Registry sold house prices is a good indicator: http://houseprices.landregistry.gov.uk/
Find out what recent sales there are in area and if you are £10k above the market.

Buy Low, Sell High - is the best strategy - what they don't tell you is Low is subjective.

18:52 PM, 24th June 2014
About 4 years ago

Hi Andy,

I agree with Adam.

You cannot worry about short term trends in property.

If you are going to own this property for a long time, then the £10K that you think you overpaid will pale into insignificance imho.

Most valuers expect to value a property with around 5% error margin.

You were willing to pay what you agreed to pay for the property at the time.

If it's suddenly announced that a big new airport is being built near your prospective house, and house prices jump 10% overnight, I can guarantee that you would be very unhappy if the vendor put the sale price up! i.e. it cuts both ways.

You purchased the property based on what you knew at the time. The only reason you are even having a "window" to ask this question is because the sale has dragged on so long.

If the delayed sale is the vendor's fault, then you would be perfectly entitled to ask for a small reduction in the property price to reflect the delay.

I wonder why the sale is taking so long?

If you had completed in one month you would have already been moved in and enjoying your new home, not worrying that you might have got a better deal!!

DC

10:34 AM, 25th June 2014
About 4 years ago

Andy, I think you hit the nail on the head mentioning MMR. See this article:

http://www.property118.com/will-mortgage-market-review-money-spinner-landlords/65134/

But, if it is the property of your dreams and you see it as a long term investment then you probably have made the right choice and should stick with it.

If neither of these apply and you have the jitters then you either walk away or explain to the vendor what you have put in writing in this article because you are the one that has to live with your expensive decision.

Best wishes.

Robert Desbruslais

9:45 AM, 27th June 2014
About 4 years ago

Hi Andy, I have written a much discussed blog on this subject;

http://www.rd-surveyors.co.uk/blog/2011/03/what-ever-you-do-dont-ask-the-surveyor-what-its-worth/#comment-361

Basically even surveyors cannot answer your question. If this is a long term buy I would focus on it being a home, not an investment. If you are still unsure, perhaps you are not in love with it enough!

Neil Robb

14:01 PM, 29th June 2014
About 4 years ago

Hi Andy

I was once told you never pay to much for a property you only pay it to soon.

I understand where you are coming from, no one ever wants to pay to much but when you add in factors like where the house is and the look of the house if it meets yours needs then go for it.

You could have two houses in the same street one selling for 50 the other 45 who get the best buy. You cant tell unless you see the inside.

One could need a new kitchen bathroom etc. so the one who initially saved 5 thousand not has to spend 15 thousand.

I agree you should never get carried away but in the scheme of things 10 thousand is not a lot and depending on the purchase price put it into a percentage. it might not be that much at all.

If I give someone my word I stick with it. If the seller was offered more for it but stuck with you would feel you have a bargain and they were the best people ever.

All the changes with MMR will soon become the normal and wont be an issue. The banks need to lend the borrowers need to borrow.

Roy B

15:31 PM, 29th June 2014
About 4 years ago

Agree ith Neil - you made the offer and were happy with it. Remember to take into account the extra housing costs that you will end up paying if the Vendor says "go away and procreate"which is what I would do.


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