Gaps between selling and asking prices

ginvzt

The news on BBC website - the difference between asking and selling price in North England is 12.5%!!!! A bit less in the rest of UK:

The smallest gap between asking and selling price was in Scotland where house prices are still rising.
But in the North of England, the discount between asking and selling price was the largest, at 12.5%.
Those vendors in Wales, the West Midlands and East Midlands, and the North West were accepting offers, on average, 10% below their asking price.
And the gap was smaller in London, at just 8.5%.

Large discounts by home sellers

napoleon

I'd want at least 20% off the asking price. Otherwise it's NO DEAL

ginvzt

And there are still people who pay asking price. Hence, the average of 10%...

misskool

If the asking price is realistic (ie priced at 2005 worth), you wouldn't offer much less than it. If they are asking for 2007 prices then you would offer much less.

There is no way of generalising what asking price you would be prepared to pay

TD5

misskool wrote: »

If the asking price is realistic (ie priced at 2005 worth), you wouldn't offer much less than it. If they are asking for 2007 prices then you would offer much less.

There is no way of generalising what asking price you would be prepared to pay

Year 2000-2002 prices for me

Kez100

I recall having a valuation on our house in 2002 and thinking 'no way' no one could afford to buy it. From that I mean our wages - one part time professional and one full time national company in a home commensurate with that sort of job. I always think along the lines of 5% deposit, 95% mortgage as that is what we have always had. So, 2002 or earlier for me. As the previous poster.

However, I can't see many ordinary people dropping at the moment, partly because they live in cloud cuckoo land (encouraged by Govt to do so) and partly because others are not dropping so a move on would cost more. We have to wait until those aware of the market's reality exist in enough numbers to make a difference - that's desparate sellers, reposessions and possibly new build (although they are still messing about on the touch lines at the moment). The quicker they effect the market in terms of lower prices the better IMO.

I do believe once bottomed out, which could take some time if umemployment rises considerably, the market will rebound as there are many sat waiting to buy due to the yaers and years of manic increases we have seen. Although I would prefer stability I don;t think the British nature as that in it. We are always either full of euphoria or full of gloom and that seems to be in our genes now (as well as ingrained in our media).

dopester

Kez I think you're being way too optimistic about "recovery" or "rebound".

This crash is different than many recent others in past decades.

It has brought down banks. Including what was one of the mother lenders of UK history... HBOS/Halifax. Together with Northern Rock, Bradford & Bingley in to nationalisation..... UBS has been given a right kicking, Fortis is undergoing rescue.... and in the USA, Bear Sterns, Lehman (+ their UK operation), and many others.

And then you've got the others who haven't gone under but have taken heavy heavy knocks, and forced into mergers, and you've got Freddie Mac and Frannie Mae being effectively nationalised in the US. AIG multi-billions again. I could go on and on with smaller names and perhaps have missed some bigger names out already.

You've got determined threats or real regulation to ensure it won't happen again, and you've got a system which just can't afford to prop up house prices where we are now, and I suspect, even after a hefty crash. Certainly not enough money will be left over to reinflate them by cheap and easy credit via toxic complicated debt instruments that a generation is unlikely to forget what carnage was caused by them.

For example, do you expect provinces in Norway to invest a couple of billion in complicated investment instruments them thinking they were AAA+ like they did, as part of their pensions and investment only to see them tank in value again. Or other banks to buy them. Game over for all of that.

Then you've got the unemployment and all the £100s of billions of Government debt it has taken on in to the future for all of this.

Really... I think some people need to wake up to the fact there won't be any fast rebound in prices.

More of a concern is just how far prices will fall. This isn't like other house price crashes. This has taken down institution after institution and torn the fabric of how the system worked and interplayed, carrying risks and damage to those who even weren't reckless and might be left standing afterwards. Added to the fact the money won't be there to lend like the past 10 years mega-boom. It isn't there. Capital isn't just magically created, and there isn't enough left to spread around for whacking house prices back up.

No rebound or recovery.

luvpump

Excellant post Dopester, .. Some are still clinging to the fantasy that once we have had a big clearout we can start all over again & in no time at all things will be back to "normal".... They wont...end of !!. As i have said in previous posts, the events of particularly the last two weeks will have profound effects for many years, probably decades to come .. & we are only just entering Recession !!..Watch unemployment Skyrocket in the coming months..

Kez100

Dopester,

I'm not talking of a rebound of epic proportions and actually agree with all you say in that respect. What I do think is out there are plenty of potential FTBS - more by the day, sat waiting. They have been waiting for years. I also suspect they are the most financially savvy. They have not allowed themselves to be pulled along for the ride.

If interest rates stay low and 90% mortgages come back and the house market bottoms out at below expectations, these people will jump on the case. So long as funding is there and there is employment, these people are a good risk not bad.

I do agree, and said as much, that unemployment will be a big player in all of this.

What are your thoughts on theis thought of mine (please do feel free to desecrate it - I'm all full of clever ideas which probably wouldn't work!)

I sort of wish house prices would just adjust over night. If house builders of new build sold their stock tomorrow at, lets say, 50% off. Not some gimmick but really 50% off wouldn't that help both kickstart the building industry and mortgage lending (which is at its lowest level and needs to increase with proper levels of reglation of % LTV limits and either no BTL or BTL with high deposits - say 50%). Yes, people who bought since 2000-2002 would be mightily sad but they are going to be anyway, let's be honest.

There are enough new builds across the country that if they were to sell at 50% off it could help an adjustment in the normal market too as EAs have hard evidence to put to sellers that no one is going to pay their prices when a new build costs a third less down the road.

The longer nothing moves the more employment in these areas suffer. The more they suffer the more it later affects others who serve them. I'm thinking the quicker the house price adjustment the better for all concerned.

lostinrates

Kez100 wrote: »

Dopester,

I'm not talking of a rebound of epic proportions and actually agree with all you say in that respect. What I do think is out there are plenty of potential FTBS - more by the day, sat waiting. They have been waiting for years. I also suspect they are the most financially savvy. They have not allowed themselves to be pulled along for the ride.

If interest rates stay low and 90% mortgages come back and the house market bottoms out at below expectations, these people will jump on the case. So long as funding is there and there is employment, these people are a good risk not bad.

I do agree, and said as much, that unemployment will be a big player in all of this.

.....
.

Unemployment will be a huge factor for the long term waiting FTBs I think. Personally, we don't need 90% mortgage, though low interest rates would be nice stable ones would be preferable.

Kez100

Once we have adjusted house prices, I don't understand what is wrong with the 90% mortgage (2-2.5 x joint max and 25 years max), I really don't. We have had two 95% quite serviceable at all times ( on 2x joint income even with the high interest rates of the early 1990's).

What they need to do is make sure they don't push the more important (in my mind) boundries - the x income, the inclusions of overtime, excess borrowing as secured loans, the self certs and the number of years to greater than 25 or retirement.