Price inflated massively since sold 1 year ago

danslenoir

We're going to see a place this weekend marketed at offers in excess of £435k. Looking at RightMove the same property sold about a year ago for £335k.

I asked the agent if the current owners had done something to the property to contribute to this big price increase and they said they weren't sure, but if they did they didn't think it was anything major. Comparing the pictures between the two adverts (current and last years) it looks pretty much identical inside and out.

The agent said the area is very competitive and that the property was valued by multiple agents (assume they picked the highest one) - 'It will get what it will get'. The price is more or less in line with similar properties in the area being marketed at the moment, though definitely at the higher end of the spectrum. I don't know why but I'm struggling to shake off this feeling of being a bit gnarked off at the idea of being asked to pay £100k+ more than someone else paid for the same 'product' only a year ago. Is this kind of inflation normal? I'm also a little worried that this big increase in a short space of time might cause problems with mortgage valuations - are they likely to take this into consideration when valuing the property?

agrinnall

Was it advertised or sold for 335 a year ago? If that's the advertised price then maybe it sold for a lot more. Or if it's the sold price, perhaps it sold under market value for some reason (for example, to a family member). If it's in line with other similar properties then there's no reason why it wouldn't value somewhere in the region of what the seller thinks it's worth.

bouicca21

Depends on the market - in my area you really are seeing increases of £100k over last year for properties in that sort of price bracket. You need to do your research on what other places are selling for.

danslenoir

agrinnall wrote: »

Was it advertised or sold for 335 a year ago? If that's the advertised price then maybe it sold for a lot more. Or if it's the sold price, perhaps it sold under market value for some reason (for example, to a family member). If it's in line with other similar properties then there's no reason why it wouldn't value somewhere in the region of what the seller thinks it's worth.

Yeah, it was sold for that price a year ago according to Land Registry records...

danslenoir

bouicca21 wrote: »

Depends on the market - in my area you really are seeing increases of £100k over last year for properties in that sort of price bracket. You need to do your research on what other places are selling for.

Mmmm. It's a competitive market alright. Places in that bracket seem to get snapped up within a week or two of being advertised. I guess the big worry is that such high short-term inflation may make us particularly vulnerable if for some reason or other the market starts stagnating or even falling. I'm not seeking to profit, but really do not want to start losing money.

DaftyDuck

It's possibly difficult not to begrudge the previous owner for getting the house at a bargain price - if he really did do so - but, if it is now worth the selling price, I wouldn't let an earlier low price deter you. Any lingering effect will slowly be being lost.

Mind you, I would want to make double-sure; triple sure, even, that the house really is worth it now, and check against every conceivable comparative I could find. Whether getting a mortgage or not, instruct your own surveyor to produce a clear market sale valuation, and get that done earlyish, so you know where you stand.

Some houses just do sell at a low price. Might be bad valuation by the previous agent, a seller desperate for a very fast sale, a turn in the market, selling to a family member (!), just a whim of good/bad luck.

It only really matters how this affects you, not how it affected the seller/buyer a year ago. Jealousy aside, of course.

G_M

Are you buying this as an investment or a home?

If a home, is it long term, or a stepping stone to something bigger/elsewhere in a year or two?

How 'ideal' is the property for you? Could you happily move into something else cheaper?

End of the day it's worth today what people will pay - what happened a year ago is history.

bouicca21

It's probably no help, but in my area prices were rocketing up last year too. I was terrified that I was buying at the top of the market, but as it turns out I wasn't. In fact this year I wouldn't have been able to afford my place at all.

Previous crazy price rises have always ended, either with a drop or stagnation. The trouble is you never know when - and I think even with a drop in prices they have always levelled out way above the previous plateau.

Only you can make the decision.

UKSBD

have a look at this one http://www.rightmove.co.uk/property-for-sale/property-39110182.html


Then look at what it sold for.


All other similar properties are £500k+

Surrey_EA

UKSBD wrote: »

have a look at this one http://www.rightmove.co.uk/property-for-sale/property-39110182.html


Then look at what it sold for.


All other similar properties are £500k+

I would guess that is as the result of a divorce settlement, and not a reflection that the property sold for £240k.

marleyboy

Of course there is the flip side. We have been in our house for 11 Months, we have done no major improvements on it, yet in that time the value has increased by around 10k. I guess it depends which way you look at it.