Neighbour selling house to child at below market price

Sue_S

3mu wrote: »

Hi
Long time browser, now need to pick the brains of MSE
I live on a nice cul-de-sac, 3 or 4 bedroom homes, mainly elderly couples. House prices sit around the £250k mark.

One couple have moved away to retire elsewhere and are selling their home to their children. On talking to them we have discovered that they are selling at a price that is shockingly lower than the market price even bearing in mind recent reset of the house price market.

I am concerned that the land registry figures for the road will now show this much lower price, this will be used by a surveyor and therefore the value of other houses and my LTV will change for the worse when I need to remortgage in a year or two. Were I to sell then the potential buyer would use this lower price to negotiate down on a sale.

Should I worry? What can I do to maintain the potential value of my house? Is what they are doing legal?

3mu

This situation arose with a house I inherited with my two siblings. I bought them out and the house has been registered as being sold at two-thirds of it's price (as I already owned a third). It's on nethouseprices with a sale price of £164,000 when in fact it's true sale value was £246,000... This is bound to skew the asking prices of neighbouring properties.

Raggs_2

Sue_S wrote: »

This situation arose with a house I inherited with my two siblings. I bought them out and the house has been registered as being sold at two-thirds of it's price (as I already owned a third). It's on nethouseprices with a sale price of £164,000 when in fact it's true sale value was £246,000... This is bound to skew the asking prices of neighbouring properties.

This isn't the same situation. You already owned 1/3 of the house, the children will be buying the entire house. Whilst at a discount, as I've stated before, this will almost certainly be classed as a gifted deposit, meaning the price will reflect it's true value (by the mortgage lenders valuation).

WalkinX

It's the home owner's business. If they can afford to and are good enough to seel a decent house to their kids they couldn't afford otherwise then why not?

It's the obession with high house prices that partly got the country in the mess it's in and with the contnuing trend means i's unlikley to get out off.

Stop being selfish.

3mu

Dear all,

Thanks for the info, my query was, in hindsight, will this sale (which I genuinely have no problem with) affect the loan-to-value of my mortgage in a couple of years time and the answer appears to be "possibly but probably not".

donnaessex

Hi 3mu I'm a little worried abou this myself as I bought our house in Feb this year for a much lower price than the other houses in my road as it was about to be repossessed.

I'm worried that the price I bought it at will affect my remortgage LTV in June 2011 but other houses seem to still be selling for well over and above what we paid for ours.

sprocker1

Ok my experience, house 4 doors down goes on sale last year at 160,000, I was horrified..... we bought ours for 180,000 12 months previously!!! Plus ours was an end terrace, and slightly bigger.

6 months later we decide to move (to where we are now) I asked the estate agent how the sold price 160,000 would affect our sale, quite simply he said, look at what else you can get for 160,000 now, "anything simular?" answer NO.....

Mine sold for 194,000 it didnt affect the price!

And then today, the house at the opp end of the row of town houses where I live goes up for sale, exactly the same, not modernised etc.

Ours was for sale at 230, 000, we paid 210,000... the lowest amount paid for any of the town houses since 2003, (and then that was not an end one)

So how much has our low buying price affected the "one at the other end?" I must admit I was a little worried when I heard it was coming onto the market, considering the fall in house prices??......

11 months after we compleated for 210,000, the identicle one at the "other end" is priced at 275,000..... I kid you not!

So in answer to the first question, no it wont affect the price's going forward UNLESS there is a trend, perhaps if 5 or 6 other neighbours did the same it would affect it, otherwise not.....

:j

Riq

You could just keep out of their business?