Buying property

Lee_H_5

Hi, I live in the Sheffield Area, and i have been trying to purchase a property for the last 5 months, this has proved quite difficult due to the recent climate, even so i have just been offered a house in which i placed a bid on about 6 weeks ago, this is because the orginal deal has fallen through. But now due to the climate changing i am not relly sure if the property is now worth what they are asking? The property was orginally on for £110,000, and i'm sure it orginally wnet for £127,000, they are still asking for £125,000 minimum.

Anyoine's advice would be appricated.

Thanks Lee

lisyloo

Lee - I would suggest you do some research and think quite seriously about it.

There are some reports out recently that prices are falling (go to the hometrack website and look for their July report).
Also mortgage approvals were down in June.
There is plenty of anecdotal evidence also that the market is slowing.

An interest rate rise of 0.25% on Thursday is almost certain and it's looking likely that we will have another one in September.
Oil prices are rising (due to terror threats), coucil tax bills, electriciy bills are also rising whilst people's wages are going up at about 3% per annum (council tax is about 6% increase).

Personally I think we are now right at the turning point and we will definitely see a slow down.
It is not possible to tell whether the slow down will just slow the market gradually or whether we are in for price falls or a crash, but falls are certainly not out of the question in my opinion.

A lot of people think I'm overly negative. That might be so, but I would strongly suggest that you do some reasearch and make up your own mind about what you think is happening to prices and also consider how you will cope with serveral more interest rate rises (3 rises of 0.25% are expected by Xmas leaving base rate at 5.25% for the end of the year). Can you cope with your mortgage rising by 0.75% or even more?

BTW - the outlook for prices depends a lot on where you live. In the North prices still seem to be rising.
However my view is that speaking nationally we are at the peak right now and it's a very bad time to buy.

I see the downside as much greater than the upside.
The downside is a slowing market with possible price falls or even a crash.
The upside is further rises, which almost all economists predict that continual rises above inflation are unsustainable.
The price increases I stated about coupled with low earnings growth means that some people are going to start struggling very soon. Interest rate increases from now on are really going to hurt people given that we've already had 4. It's going to start to bite.

All in my opinion.

theGrinch

I think it is worth considering whether you are buying the property as a home ie > 5 years or as an investment. If its a home and you really want it, then its worth speaking to the agent making an offer.

If its an investment then I would wait and see how he market goes in september.

I think it is too early to say the market is slowing and to take this as a trend. I cant remember an August that didnt slow in the last 30 years.

lisyloo

I think it is too early to say the market is slowing and to take this as a trend. I cant remember an August that didnt slow in the last 30 years.

Some of the figures produced by the various surveys are seasonally adjusted, others are not.
So yes, you need to take any data in the context that it is reported.

There are conflicting reports also (for exmaple Hometrack shows falls whilst Nationwide showed 2.1% growth for July alone).
This is partly due to the fact that the different surveys take their data from different parts of the house buying process therefore they are looking at different periods of time. You need to take this in context as well.

Basically we won't be able to agree on whether the market has peaked or not until after the event.

The only data that is totally correct is the Land Registry data as that shows actual house price sales but that is 3-6 months out of date, so doesn't help much if you want to know what's happening now.

Pal

Why not try offering £100k and see what they say?  They might be getting desperate to sell and may say yes.  If they say no, walk away and think about it again for a couple of weeks.  They might still come back to you and accept at a later date, and after a couple of weeks you can always go back with a higher offer if you decide you really want it.

Of course, even at that discount the same risk warnings Lisyloo gave still apply.

Woby_Tide

well according to the Hometrack report prices in Sheffield were up last month (the 7th highest rises out of the cities), in SOuth Yorks in general they were also up

so whilst overall the hometrack report overall says that prices are going down, it depends on what you are buying and where you are buying

I'd agree about offering less than what has fallen through on the property, though offering them 20% less than previous offer is probably puching it too far, though thats your choice, may harm subsequent bids if someone else is against you and they know you were offering very low originally

theGrinch

I would be inclined to initially offer £112,500 and see how it goes. The worse they can do is laugh, but all offers must be put to the vendor and we cant second guess their position.

I take it you have finance in place and can move quickly.

poppy10_2

lisyloo wrote: »

Lee - I would suggest you do some research and think quite seriously about it.
Oil prices are rising (due to terror threats), coucil tax bills, electriciy bills are also rising whilst people's wages are going up at about 3% per annum (council tax is about 6% increase).

Personally I think we are now right at the turning point and we will definitely see a slow down.

This is all true. :T

Just a year or 4 too early!.