Thoughts on House Pricing..

SavvySaver24

Hey All,

Just want to get some thoughts as to whether I am wildly out of touch with my house pricing expectations..

So, we have found this lovely village location has a row of 9 cute cottages one.Two are currently on the market, and I have found out one is going on in a couple of months. I have been tracking Zoopla carefully in regards to the buying and selling prices of all 9 houses.

So, in regards to the 2 currently on the market, both need significant work to modernise/open up the kitchen etc.Both are identical in layout. Both are terraced.

House A - Is on the market for £350,000 (went on 3 weeks ago).

House B - Is on the market for £360,000 (went on in August 2017).

We put an offer in for House A that wasn't accepted, but we know the highest offer they have had so far is between £325,000 and £330,000.

Through friends of friends we have found out that House C is going on the market. This house was last sold in 2006 for £255,000. House C is fully renovated, has had a loft conversion and has had the kitchen and dinning room to create one large kitchen diner. It would need NO work doing to it.

Looking at Zoopla it was put on the market both in March and July 2016, for £410,000!! But didn't sell. Keep in mind all renovation work was done PRIOR to the 2006 purchase.That equates to a rise of 160% over 12 years.

In our own heads (prior to finding out on Zoopla how much it was up for in 2016), we thought £370,000 would have been a fair price on the basis of how much the two others on the row are up for, and the realistic offers they have had. And we would have spoken to her in the hope of maybe getting a private sale to knock of the EA fees, could have also moved at her own pace as we are first time buyers etc.

So my question is, am I wildly out of touch!? Based on Zoopla house prices in that postcode have gone up 39% in the last 10 years, but £255,000 to £410,000 is 160%! What am I missing

NineDeuce

The conversion can add value. It is probably why the proprietor bought it. It could have been in need of complete renovation and have been on sale at auction... 39% is just an average.

hazyjo

Impossible to say without knowing what area and what local prices have done.


I bought for £275k-ish in 2013. Four years later I sold for nearly double.


What someone paid however many years ago is largely irrelevant (be that 2 years or 10 years).

SavvySaver24

Ye but my point is all the renovation/extension was done by the previous owner. Prior to when it was bought in 2006.

JoJo1978

410 vs 350 is a 17% premium which sounds about right for a renovated vs not when the renovation is some years old now. Postcode comparisons won't be accurate enough unless every other property is similar to the row you're interested in. But it didn't sell at 410, so offer 370 and see what happens? Good luck!

Btw - the house we recently sold increased by 55% without us doing anything to it. 420 from 270, the multiplier is 1.55 but the comparable figure to the 39% Zoopla reports is 55% (new price/old price minus 1)

AnotherJoe

OP I think you are giving far to much credence to what happened in the past.
Houses are worth what they are worth now, and past sales have really no impact on that at all other than possibly it may give sellers unrealistic expectations of what they should get and so they wont sell, something the occupants of all three houses seem to be suffering from, certainly owners of B&C dont seem especially bothered about moving.

martinsurrey

SavvySaver24 wrote: »

Ye but my point is all the renovation/extension was done by the previous owner. Prior to when it was bought in 2006.

That is not relevant at all.

If the houses without a loft conversion and in need of modernisation are going for £330-350k

Would make a house with a loft conversion and in good order about £400k IMO.

SavvySaver24

Fair enough thanks for the input. Suppose I see it from both the past and the now perspective.

Past perspective = Average terraced house prices in the postcode (not all house prices, I should have clarified) went up 39% in the last 10 years. So I don't get why this one has gone up 160% in 12 years.

Current perspective = The one in need of modernisation and up for sale now (still totally habitable anyway) has had an offer of between £325,000 and £330,000, nothing any higher. There is no way it would cost anywhere near £80k to do the work required to match the other one.

But hey ho is what it is. Thanks for the input :-)

goodwithsaving

Any body who bought a house years ago still requires to buy a house at today's prices if they move. What they bought for is largely irrelevant. You don't know what they've done to it either,whether new boiler, new carpet, painting throughout etc.

No house requires 'no' work. Remove the furniture and even the most perfect looking house may require a paint touch up

MobileSaver

SavvySaver24 wrote: »

Average terraced house ... went up 39% in the last 10 years. So I don't get why this one has gone up 160% in 12 years.

Are you getting your maths mixed up? House C has gone up by 60%, not 160%. So the fact that the average (presumably undeveloped) house price went up by approx 40%, it doesn't seem too wild that a completely finished, no work to do, house might have gone up by 60%; a lot of people will pay a premium for someone else to have dealt with the upheaveal, noise, dust and time spent on renovating a property.

SavvySaver24 wrote: »

There is no way it would cost anywhere near £80k to do the work required to match the other one.

I've just had my kitchen redone, that alone cost well over £40k...

SavvySaver24

Sorry yes! I meant 60%.

OK well we have wildly different budgets in regards to be spending on a kitchen haha.