Is it reasonable for us to drop our asking price given current climate?

homersimpson246

There are certainly unusual times and no one knows what is going to happen to house prices although I think its a fairly safe bet that they won't be increasing any time soon.

We were in the middle of chain that collapsed last week and will now have to go through the process of hopefully reselling our house once things start to return to normal, in theory we are in a good position as any drop in prices should be good for us, we get less for our house but pay less for the one that we are buying and if its a reasonably consistent percentage we should (in theory be better off).

The rub is that not only will a lot of first time buyers not want to or be able to buy to start a chain but a lot of sellers at the top won't want to move because they were hoping to downsize and now won't get as much money back so may wait it out for a few years.

The laws of supply and demand will apply, we could reduce our house by 10% and a first time buyer might want it but the people who own the sort of house we want to buy and are probably downsizing probably won't want to accept a reduction so will either take their house off the marker or just sit on there at a comparativly high price.

There will always be exceptions to this with people who have to buy and sell but in general number of transaction will probably just reduce.

In answer to the OP's question, if they think that a reduction would be reasonable and warranted based on the value of the property then there is no harm in this, if the vendor is offended by this they can always say no.  If they then refuse to sell it to you even at the previously agreed price they would be very foolish indeed.  If our buyers had asked us for a reduction rather than their buyers pulling out we would certainly have considered it in this market, especially if we could have passed some or all of it on up the chain to some extent.

Safe'n'Sound

MobileSaver said:

Safe'n'Sound said:

I think if there is a drop, it will be so small the statisticians will not bother applying it.

I was thinking about this from a different angle over the weekend...

The lockdown has introduced such a huge drop in transactions that it is not unthinkable the normal House Price Index statistics will be suspended for a few months; the valid justification being that statistically the number of transactions will be so small as to be statistically unreliable. If this happens you can imagine some people here and most people on the HPC forum will be absolutely seething!

From the Bank of England Monetary Policy Report (May 2020)....

House price statistics are particularly affected by the current situation. The number of transactions in April is expected to have been much lower than normal (Section 2.4), making it very difficult to estimate meaningful average price statistics. As a result, the ONS plans to temporarily suspend publication of the UK House Price Index after March’s figures have been released.

So I guess the amount of data will be so low, the price index will be unreliable, which is understandable. I'm not sure how many sales need to be on the books for a 'meaningful' statistic. I bet you get the usual suspects waiving 'The end is nigh' placards on the stories of woe from a handful of individuals though!

MobileSaver

Safe'n'Sound said:

MobileSaver said:

it is not unthinkable the normal House Price Index statistics will be suspended for a few months;

From the Bank of England Monetary Policy Report (May 2020)....
 the ONS plans to temporarily suspend publication of the UK House Price Index after March’s figures have been released.
So I guess the amount of data will be so low, the price index will be unreliable, which is understandable.

Well there you go! Good find.

As you say totally understandable and a completely valid reason to suspend the Index until transaction levels pick up again; the HPC lot will not be happy and no doubt conspiracy theories will abound.

blue_max_3

MobileSaver said:

Well there you go! Good find.

As you say totally understandable and a completely valid reason to suspend the Index until transaction levels pick up again; the HPC lot will not be happy and no doubt conspiracy theories will abound.

I've got about 150 properties bookmarked over three locations in the UK (London/York/Manchester). I'm seeing few sold, few reductions and many stagnant. I'd agree that nothing is really moving in real terms. Hopefully when things start to move again, we'll have a better idea.

eidand

blue_max_3 said:

MobileSaver said:

Well there you go! Good find.

As you say totally understandable and a completely valid reason to suspend the Index until transaction levels pick up again; the HPC lot will not be happy and no doubt conspiracy theories will abound.

I've got about 150 properties bookmarked over three locations in the UK (London/York/Manchester). I'm seeing few sold, few reductions and many stagnant. I'd agree that nothing is really moving in real terms. Hopefully when things start to move again, we'll have a better idea.

I am starting to see movement, new houses appear on the market. slow moving but it's a start. i think we need to give it another 4 weeks at least.

abanksee

MobileSaver said:

Safe'n'Sound said:

MobileSaver said:

it is not unthinkable the normal House Price Index statistics will be suspended for a few months;

From the Bank of England Monetary Policy Report (May 2020)....
 the ONS plans to temporarily suspend publication of the UK House Price Index after March’s figures have been released.
So I guess the amount of data will be so low, the price index will be unreliable, which is understandable.

Well there you go! Good find.

As you say totally understandable and a completely valid reason to suspend the Index until transaction levels pick up again; the HPC lot will not be happy and no doubt conspiracy theories will abound.

Nobody has said they're about to crash right now. They will however go down over the next 12-18 months. I'd be willing to place a large bet on it. I know somebody who has just negotiated a 7% reduction on his purchase. Not huge but a big enough chunk, its already starting to lower, but slowly.

Crashy_Time

abanksee said:

MobileSaver said:

Safe'n'Sound said:

MobileSaver said:

it is not unthinkable the normal House Price Index statistics will be suspended for a few months;

From the Bank of England Monetary Policy Report (May 2020)....
 the ONS plans to temporarily suspend publication of the UK House Price Index after March’s figures have been released.
So I guess the amount of data will be so low, the price index will be unreliable, which is understandable.

Well there you go! Good find.

As you say totally understandable and a completely valid reason to suspend the Index until transaction levels pick up again; the HPC lot will not be happy and no doubt conspiracy theories will abound.

Nobody has said they're about to crash right now. They will however go down over the next 12-18 months. I'd be willing to place a large bet on it. I know somebody who has just negotiated a 7% reduction on his purchase. Not huge but a big enough chunk, its already starting to lower, but slowly.

Smart seller IMO.

scrola

Splatfoot said:

Splatfoot said:

Those posters that are obsessed with prices going down, why did you not buy in the months/years after 2008? When there was actually a house price reduction? I'd be interested to know. 

Anyone?

Well I did. Neighbour paid £405k in late 2007 we paid £300k in late 2008, house opposite went for £285 at end of the year. All identical new builds. People are right though as they were all valued the same when we sold last year, so it didn't make much difference over 10 years........except we we didn't pay a mortgage on £105k and had it a equity for our new house.

MobileSaver

scrola said:

Well I did. Neighbour paid £405k in late 2007 we paid £300k in late 2008,

Of course you did new poster who signed up to MSE just to post this.

Splatfoot

scrola said:

Splatfoot said:

Splatfoot said:

Those posters that are obsessed with prices going down, why did you not buy in the months/years after 2008? When there was actually a house price reduction? I'd be interested to know. 

Anyone?

Well I did. Neighbour paid £405k in late 2007 we paid £300k in late 2008, house opposite went for £285 at end of the year. All identical new builds. People are right though as they were all valued the same when we sold last year, so it didn't make much difference over 10 years........except we we didn't pay a mortgage on £105k and had it a equity for our new house.

You did well. And better than spending the following 10 years in renting. My question is trying to gauge when the people who go on about the 'New crash' will ever buy! I had a look at our local market and a house sold in Oct 2008, during the crash, went for £335,000. And then sold again in 2019 for £450,000.  It doesn't really stay 'low' for long and the longer they wait, the more boats they miss.