Should I pull out of my purchase last minute? Covid concerns.

Splodges

JayRitchie said:

Splodges said:

I'm considering first thing tomorrow morning telling my solicitor not to exchange. Then telling the estate agent I'd like to pull out unless another price could be negotiated. I wouldn't have considered doing something like this before the last couple of weeks. And I'd be quite happy to pull out if they didn't want to offer the price- I was willing to pay a fixed asking price for the last 11 months but I think the perceived value has gone down now. Thoughts on this? I still expect it likely that prices may drop, if I can save £5k-10k it would allow a small safety net to reduce risk and I'd be happy to walk away without the deal.

Not sure £5k is where it is at. 25% maybe?

I don't think 25% is something they would consider however it could be how much it goes down by. I think that will be a definite no from the seller?

dinkylink

Studio flats are the type of property that are MOST affected by a downturn. So if you buy it you could be stuck there for a long while if you don't want to lose money. No one has a crystal ball as to how this will all pan out, but if I were having doubts it'd take more than a £5k- £10k reduction not to pull out of purchasing this type of property.

Thrugelmir

Mickygg said:

Thrugelmir said:

Mickygg said:

homeless9 said:

Can you offer less, or is it too late?. UK has now shutdown. Hospitality sector switched off. Next to nobody travelling abroad, or travelling to UK. Cruise liners and airlines about to go bankrupt. Sport switched off for the rest of the year it seems. Utter devastation. 

Enlighten us all which airlines and cruise liners are going bust that you are so sure on? Hard times for sure but this is a bold statement when all you are doing is guessing or reading the daily fail.

Doesn't take much to realise that with few planes flying and next to no cruise ships sailing that companies are going to have financial difficulties. Quantas is standing down 20,000 of it's employees for six months without pay for example. That's how real the news is. 

I know how real the news is. Everyone does. I am merely pointing out the panicking and hysteria doesn't help. This poster is saying cruise liners and airlines are definitely going bust all over the place. Unless this person has a crystal ball no one knows. 

For the record I didn't actually say go "bust".  I merely gave these as clear illustrations at a macro level. Of far wider very apparent issues. 

JayRitchie

Splodges said:

JayRitchie said:

Splodges said:

I'm considering first thing tomorrow morning telling my solicitor not to exchange. Then telling the estate agent I'd like to pull out unless another price could be negotiated. I wouldn't have considered doing something like this before the last couple of weeks. And I'd be quite happy to pull out if they didn't want to offer the price- I was willing to pay a fixed asking price for the last 11 months but I think the perceived value has gone down now. Thoughts on this? I still expect it likely that prices may drop, if I can save £5k-10k it would allow a small safety net to reduce risk and I'd be happy to walk away without the deal.

Not sure £5k is where it is at. 25% maybe?

I don't think 25% is something they would consider however it could be how much it goes down by. I think that will be a definite no from the seller?

I think you are right - its more likely than not that they would say no. Not impossible they will be making the same calculation of course, but most people are not.

Splodges

dinkylink said:

Studio flats are the type of property that are MOST affected by a downturn. So if you buy it you could be stuck there for a long while if you don't want to lose money. No one has a crystal ball as to how this will all pan out, but if I were having doubts it'd take more than a £5k- £10k reduction not to pull out of purchasing this type of property.

Thank you for your advice, what makes studios the most volatile when market prices drop?

MovingForwards

Splodges said:

dinkylink said:

Studio flats are the type of property that are MOST affected by a downturn. So if you buy it you could be stuck there for a long while if you don't want to lose money. No one has a crystal ball as to how this will all pan out, but if I were having doubts it'd take more than a £5k- £10k reduction not to pull out of purchasing this type of property.

Thank you for your advice, what makes studios the most volatile when market prices drop?

Lack of rooms.

Can't grow a family into them, where you can a 1 or 2 bed flat, due to having separate lounge / bedroom(s).

If you know you will be single for the rest of your life eg retired and jaded with relationships, or happy to have friends only, then they are great for that.

If it's a stop gap due to being the only thing you can afford, have a partner and will want to upsize in the next few years, not so good.

Splodges

MovingForwards said:

Splodges said:

dinkylink said:

Studio flats are the type of property that are MOST affected by a downturn. So if you buy it you could be stuck there for a long while if you don't want to lose money. No one has a crystal ball as to how this will all pan out, but if I were having doubts it'd take more than a £5k- £10k reduction not to pull out of purchasing this type of property.

Thank you for your advice, what makes studios the most volatile when market prices drop?

Lack of rooms.

Can't grow a family into them, where you can a 1 or 2 bed flat, due to having separate lounge / bedroom(s).

If you know you will be single for the rest of your life eg retired and jaded with relationships, or happy to have friends only, then they are great for that.

If it's a stop gap due to being the only thing you can afford, have a partner and will want to upsize in the next few years, not so good.

That all makes sense, thank you for the insight. I guess I'm considering it a stopgap too where I could sell after the 5 year fixed if I have a family, that's why I was concerned about losing money on it in that timeframe I think.

Splodges

Thank you to everyone for the advice thus far. Just as an update, I've asked to re-negotiate for £10k less. £5k wasn't substantial enough to change anything, 10% of the property price seems significant enough to take some risk on it and reasonable as I don't think they could demand their previous fixed asking price in this market.

moneysavinghero

hotnoise said:

graphs said:

Anything between 20-40% falls in property looking likely. This virus is not going away and recession is coming if not a depression.

And you're getting those figures from...? Property prices didn't even drop 20% in 2008, and that was a banking crash that directly affected mortgaging and the housing sector.

I think people are vastly overplaying how badly house prices are going to be affected with this current economic downturn. I'm buying a property myself right now, so I'll be sure to pop back and let you tell me "told you so!" if things pan out as miserably as you think they will.

Back in 2008 interest rates were slashed from 5% to 1%. They are now 0.1% without any room to effect a similar slashing.

Davesnave

moneysavinghero said:

hotnoise said:

graphs said:

Anything between 20-40% falls in property looking likely. This virus is not going away and recession is coming if not a depression.

And you're getting those figures from...? Property prices didn't even drop 20% in 2008, and that was a banking crash that directly affected mortgaging and the housing sector.

I think people are vastly overplaying how badly house prices are going to be affected with this current economic downturn. I'm buying a property myself right now, so I'll be sure to pop back and let you tell me "told you so!" if things pan out as miserably as you think they will.

Back in 2008 interest rates were slashed from 5% to 1%.

Then it's odd that we were getting 6 to 6.5% on our money in various banks during the first half of 2009!

Made a tidy profit on renting temporarily until July of that year.