Ready to exchange on house purchase - should we reduce our offer due to COVID-19?

SouthLondonUser

sjc93 said:

Crashy_Time said:

I live in the cotswolds so house prices aren't going to 'dramatically' drop around here.

How do you know? 

The fact that I've been born and bred here and have watched house prices rocket over the last decade due to supply and demand & the popularity of the area... During the banking crisis, people were still buying around here and even now, I'm getting weekly alerts about multiple properties going up on Rightmove/Zoopla/Onthemarket.

There's several new build sites going up at the moment that get snapped up within weeks and my house that I'm in the process of purchasing has gone up by at least 20K since it was last sold in 2017. Although it's not exactly 'London' prices, but the cost of living around here is pretty similar and I really cannot see a dramatic drop due to tourism, and that we have a LOT of big, big corporate organisations (aircraft, government, big insurance companies) who are always employing & expanding.

Maybe prices in the Cotswolds won't crash, but you just cannot know. The fact that you like the area and find it beautiful is totally, completely and utterly irrelevant. Demand won't have to do only with how many people like the area, but with how many people can afford it, which in turn will be driven by how many people will have stable jobs and what the lending criteria of the banks will be. If you know what any of these will look like, then I would certainly ask to borrow your crystal ball, because mine isn't as good.

The banking crisis is also not particularly relevant, because this is the worst pandemic of the last 100 years or so; last I checked, the banking crisis did not paralyse the entire world economy for months and months.

Oh, and I'd also be curious about the details of build sites getting snapped up "within weeks"; surely you know what many banks have tightened their lending criteria? Barclay's 60% LTV criterion may have more to do with reduced staff than anything else, but Nationwide's 75% LTV maximum and the facts that many lenders are no longer accepting bonus, overtime and have tightened other criteria don't.