Is this insulting?

geordiepaul2001

That makes sense.
It would be great if they did come down to 85k-90k, would save a small fortune over the lifetime of the mortgage.
I am a litle shocked that the estate agent called back less than 24 hours after the bid was rejected to see if we wanted to increase the offer.
I guess its common practive, as they know you have some interest in the property.

Nenen

geordiepaul2001 wrote: »

We are hoping to not have to surpass £105,000.

I have searched for the house but cannot find it.
I can find a similar house in the same street which went for £50,000 in October 2002 - http://www.houseprices.co.uk/e.php?q=NE27+0HW

Does that help?

The Nationwide Building Society have a 'house price calculator' where you can put in a price paid for a property in year and quarter (in your case 50.5K in last quarter of 2002) and then see what it would be worth approximately today (assuming no major work done). This is the link:
http://www.nationwide.co.uk/hpi/Default.asp?calculate=true

Results:-
A property located in North which was valued at £50,500 in Q4 of 2002, would be worth approximately £89793 in Q2 of 2007.
This is equivalent to a change of 77.81%.

Therefore, if the property you mentioned is very similar to the one you are hoping to buy then around the 90K mark looks fair.
Good luck and fingers crossed you will have a lowish offer accepted soon... do let us know!

nollag2006

Another good post from Nenen.

I use the Nationwide House price site when dealing in property. Another one that I've found to be very accurate, and more precise is:

http://www.propertypriceadvice.co.uk/get_valuation/

Why not tap the details in there, and tell us what it comes back with...

TTMCMschine

What are you really happy offering on this house? Don't think about the price the vendor has put on. I wouldn't keep offering increments because the vendor will just keep upping the price. Use other reasons why you are not willing to offer more e.g the interest rates are very wobbly at the moment, America is having a housing crash where there is a possibility (and we already are being affected by it) that this could affect us a lot - some mortgage lenders are already raising their rates regardless of any interest rates cuts/raises or stays. Be firm on the price you want to offer - but be prepared to walk away if that offer is lower. I personally would never offer the full asking price of a house at the moment, as i think things are very risky. The market to me is slow, and overpriced. Do not get attached to it either, try and be objective - e.g it doesn't have a garden, is that something you're going to want in the near future? Good luck.

geordiepaul2001

They are certainly useful links.
Just a shame that I don't what work was carried out on the property after they bought it.

geordiepaul2001

Property price advice give an adverage of £130,000, whilst the nationwide website gives a price of £90,000

NSR2

geordiepaul2001 wrote: »

I just wish I understood how the bank of Englands interest rate worked

Ok my understanding of IRs.
Basically you have inflation, which is the decrease in value of your money. It works like this:
1)Things cost more
2)You demand more money from your employer
3)Your employer has to charge his customers more money to pay your wages.
4) goto 1.

It's a cycle and it's evil. Its evil because your wages won't keep up with the increases in price.
So if this starts to happen, the MPC (Monetary Policy Committee) of the BOE will increase IRs.

Now this happens:
1)Things cost more
2) You demand more money from your employer
3) Your employer tells you to get stuffed. The companies overdraft has just increased, all the other employers out there aren't hiring anyone, so the idea of paying you more money goes out of the window.


Obviously a bit over an over simplification there. Increased IRs also mean people save more money, rather then spend it, so your employer may have to decrease prices, to get more customers. There are load of other effects as well.

Now THE REALLY REALLY IMPORTANT THING IS THIS!!!! You don't borrow from the BOE, neither does your employer.
Instead the banks do. The banks also borrow from each other.
The banks lend that money to you in the form of a morgage.

So you go to a high street bank and borrow 100K. The bank charges you 6.75%, and borrows money from the BOE for 5.75%. So the bank makes it's money. If the BOE increases interest rates, your IR goes up to.

However there isn't anything stopping the banks from borrowing money from other banks / money markets. Now you see how they can make money from your debt right? Well they can bundle up your debt, and some other borrowers and create a "bond". This bond they sell on.

In the US banks have lent out to anyone. Including people who had no change of paying the loan back. These people are "sub-prime". The people seller the morgages worked on commision. So they didn't care who they were selling to. The banks lending the money didn't care either, since they could take their debt, turn it into a bond, and sell the bond on the open market. British banks have bought these bonds.

Now all the british (and european) banks are worried. Their money has been loadend out in the US to subprime borrowers. So all the banks don't know how much money they are going to lose. They don't know where the bad debt is. And they don't know if any banks are going to go bankrupt.

This means british banks don't want to lend to each other. You need to look at something called the LIBOR rate. It's the IR rate the banks lend to each other. The LIBOR rate has skyrocketed, it's way beyond the BOE base rate.

So banks now can't get money to lend to you.
This means:
1) They need to get money from savers. So they will have to increase their savings rate, which in turn means your mortgage rate will go up.
2) They have to increase the IR on Bonds, which means your morgage IR will go up.
3)They have to borrow from other banks using the LIBOR rate which means your morgage rate will go up.

Now you see those three points up there? Well none of them are related to the BOE base rate. The big !!! point is this. The financial world is currently all screwed up, and your morgage rate will increase as a result.

So if I were you I would stick to your intial offer*. If they ask for more money, just mention the key phrase "My morgage IR has gone up because of the LIBOR rate, so I'm strapped for cash".

*Of course I'm not you, so if it's a nice house and you really want it,do your own thing. In fact I would feel bad if you didn't get it now, so just ignore me .

Also do some calculations, and make sure you can afford the house when morgage IRs go up....


Oooh one last thing, inflation is currently low (1.9%), and the banks want cheap money from the BOE, so they are all screaming for the BOE base rate to be lower. However a lowered BOE base rate may not go through to you

geordiepaul2001

Thanks for that.

Whenever I figure out what I can afford, I tend to do the calculations based on an interest rate of 10%.
Lets just hope it doesn't get too silly.

I have stuck by my offer at the moment.
I am not sure whether its worth mentioning to the estate agent what work needs done.

The ceiling in the garage needs replastered,

The kitchen ceiling needs repainting after the bath overflowed in the past,

The kitchen laminate has gaps between them, and will need replaced,

One pane of glass in the double glazed side window has a crack,

The hallway will need entirely redecorated as some of the wallpaper was, torn off when they had the wall replastered to fix a damp issue,

The front wall is part extended (in height) but not completely finished


None of the the above make the accomodation unhabitable, but they are all things we would like sorted if we buy the property.

missprint

A damp issue? Warning light, is that rising damp (it being a hallway) and could this be a long-term problem? It is certainly a bargaining point. Don't be too willing to overlook things like this, they may not be just a niggle and could be costly in the long run.

geordiepaul2001

They advised that when they had there survey done 3 years ago, 2 areas of damp were found.
One in a sotrage cupboard which houses the combi boiler and the other at the bottom of the stairs.
They stated that they paid a few thousand to get the issue fixed as soon as they moved in.

When we viewed on subsequent occasions, we noticed that there was a smell of damp and all the windows were open when we visited (on every occasion). The property has not been lived in for 3/4 months and I just put it down to lack of circulating air at first.

Surely damp would be picked up at the survey stage