What to offer post-referendum?

mrsunnybunny · 29 June 2016 at 8:08PM

Some people definitely seem to have pulled out due to Brexit.

I bought a new build property on a development in Greater London a few weeks ago and have been watching the development very closely. At the time of reservation, I had to fight for the place with people queuing up to get a house at the asking price. About 2 weeks before Brexit, a new phase with +-15 houses was released. A few days later, all but 3 were reserved. A bit less demand, but still significant. For the next week this number did not change.

Interestingly, since Brexit at least 5 people seem to have jumped off as 8 houses from the same phase are available again.

This is London commuter belt inside zones.

satchef1 · 30 June 2016 at 5:38AM

ElsieMonkey wrote: »

I'm currently buying a property. It hasn't once crossed my mind to offer a reduced price, no matter what my crystal ball says might or might not happen. I'm not buying a short term investment, I'm buying a long term home. Most long term home owners will see drops and rises in the value of their home during the duration of their ownership, this is normal and expected. Therefore the price I was prepared to pay pre-referendum is the same today.

The only exception I would say are those buying for short term investment (buying property to do up and sell on in a matter of months) or those buying with 95% mortgages for example - I can understand these people being slightly more cautious than before.

The value of housing is based heavily on sentiment, which is why during a fast-moving boom buyers can find themselves losing out to offers far in excess of the asking price. This works the other way though, with values dropping when sentiment turns negative. That is what is happening now. Worries about potential economic problems in the near future are causing a slowdown in the market and a small depression in house prices. Buyers changing their offers are simply modifying them to match the new reality of the market.

I understand your point, but you seem to be describing how you wish the market worked rather than how it actually does work. Maybe it would be better if house prices were more directly affected by real economic metrics, rather than a vague thing called 'sentiment'? Maybe it would be better if everyone focussed on the long-term only. But these aren't the realities of the market. If everyone else is revising their offers down by 10% and you aren't, then you're overpaying.

lewishardwick · 30 June 2016 at 7:42AM

So I went fo a second viewing of a property.

Got told by the EA that there's two offers already well within the asking range.

No sign of a slow down here.

kilby_007 · 30 June 2016 at 7:54AM

lewishardwick wrote: »

So I went fo a second viewing of a property.

Got told by the EA that there's two offers already well within the asking range.

No sign of a slow down here.

and you believed them? There might be other offers on the table - EA's aren't supposed to lie about other offers (but they do) however their interpretation of "well within asking range" might be a little overstated...

jorpati · 30 June 2016 at 9:48AM

kilby_007 wrote: »

and you believed them? There might be other offers on the table - EA's aren't supposed to lie about other offers (but they do) however their interpretation of "well within asking range" might be a little overstated...

I was about to say samething.. I have been bluffed by EA several times when I was negotiating my house price.. they keep saying there are other buyers ready to buy the property and how good deal I am getting. I pulled out few times but they kept coming back to me meet the offer I put it and have finally agreed and waiting for exchange.

Regarding the original post, I am pretty much in same situation. When I saw the the share price of property developers falling down, I wasn't sure whether I should regonitate the offer I made or keep my original accepted offer. Share prices seem to be picking back up after bit of turbulence but I am still not 100% sure. As with all buyers, it is something to be worried about when there is a big change in the market, you don't want to end up in negative equity just because you didnt negotiate the price when you had the chance..