What % decrease in asking price would it take for you to consider buying?

lincroft1710

Do you want the house to live in? If so, negative equity would only kick in, if when you sell, the house is worth less than your outstanding mortgage. In the early 1990s, some houses halved in value. If it is truly your "dream home" and you intend to stay there for several years, you should offer what, in your opinion, the house is worth and you can afford comfortably to repay. It has been posted on this site many times and I will repeat it - it doesn't matter what price a house (or any other item) is marketed at, it is only worth what someone is prepared to pay for it. If the house was marketed at an unrealistic figure to start with, any true percentage drop will be impossible to calculate.

amcluesent

I'd say average 30% drop +/- 15% depending on building type, local economy, population trends etc. So new build flats in the NE/NW/Wales will be hammered, des-res semi in prime London commuter zone will fare best.

m00m00

to me it's all about when it makes more sense to buy than to rent

ie, when I get better value for money buying over renting.

this isn't likely to be the case for me for at least a year or so.

The market where I am is in complete mexican standoff mode, with buyers in denial and Morricone music playing everytime I walk past an estate agent.

mr.broderick

m00m00 wrote: »

to me it's all about when it makes more sense to buy than to rent

ie, when I get better value for money buying over renting.

this isn't likely to be the case for me for at least a year or so.

The market where I am is in complete mexican standoff mode, with buyers in denial and Morricone music playing everytime I walk past an estate agent.

I nearly agree with all this but surely buying should have a slight premium over renting? Missed me moomoo? Be honest....

m00m00

it does have a slight premium, but not 2-300 a month more, which it what it would be at the moment for an identical property.

also. I'm in a slightly different position than most, as I have no idea where in the country I'll be when my girlfriend finishes her PhD later this year. We might stay here, we might not.

WTF?_2

I'll consider buying when the price is such that a the interest component of a 90% LTV mortgage is less than or equal to the monthly rent.

I won't be borrowing 90% but to me the 'rent vs mortgage interest' calculation is a good value of the real worth of the house.

Currently, prices around my place show an interest payment of approx 2x rent (a bit less). That's better than a year ago when they were over 2.5x but they have a way to fall.

(Of course, hopefully I won't be borrowing at all but I'd like a little more than a typical FTB house so I'll probably need some sort of mortgage.)

PasturesNew

It's about the right house at the right time, rather than specific %age drops.

I'd hope to be in the right place and find the right house somewhere near the bottom, (25-30%).

But while house price inflation is less than the savings rate after tax, there's no sense of urgency/losing ground.

zippygeorgeandben

In answer to the OT, I'd say a 25% reduction would get me showing my first hand but noone can predict the future. We'd all like to buy at the lowest and sell at the highest but it doesn't work like that unfortunately!!

Ben

brit1234

When prices are down above 35% I will do a cheeky 50% offer or look for similar at Auction. Maybe a ex buy to let. :rotfl:

carolt

Yes, I think 25-30% is rather conservative actually for falls - that's only equivalent to last crash BUT prices have risen far higher relative to incomes than then, so have further to fall. Also, high wage inflation then meant less falls were required to bring real prices back into line with historical averages (income multiples etc). This time round, despite high inflation, wage inflation is not keeping pace, so I'd expect nominal falls to need to be that much higher.

Also, the credit crunch (which I don't remember existing last time on anything like this scale) means that as fast as house prices fall, mortgage rates are rising to more than meet ie despite a lower 'sold' price, for all but cash buyers, the monthly cost is STILL as high as or higher than it would have cost to buy the same property a year ago. So prices need to keep falling just to keep pace with rising interest rates, as well as falling real take-home pay - a lot more than 30% I expect.

As !!!!!! says, I'll buy when it once again makes sound financial sense to buy rather than rent ie when monthly interest payments on a 90% mortgage are equal to or pref less than rent.

Don't think you can look at percentages on a house by house basis, though, as obviously individual house prices came onto the market with ludicrous asking prices in some cases and so 30% off is meaningless. Likewise, comparing sold prices from a past year, whilst with less margin for error, may not work, as people may have paid over the odds for it then. So comparing overall falls from the LOCAL area is probably more helpful; obviously national falls only tell part of the story, as results are frequently skewed by vast rises/falls in some areas, eg Northern Ireland, Scotland etc, out of kilter with the rest of the UK.

FWIW, the houses I'm looking at buying cost 200-250K until a couple of years ago, then shot up more or less overnight to asking 325-350K last year. We stopped looking at about 275, but won't be re-looking until prices fall below 200K again, as rising interest rates mean that (despite rising salaries in the meantime), it costs a lot more to borrow 90% of 200K now than it did a couple of years ago, when rates were often below 5%.

Then again, if the credit crunch 'resolves itself' and interest rates fall back again to recent lows, with 5 or 6 times multiples as standard, then maybe there is more scope for borrowing more. But, realistically, can't see that happening any time soon.

No - I'll wait for bigger nominal falls, thanks. In no hurry...