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

MobileSaver

abanksee said:

Who outside of this forum thinks there wont be a drop of any kind?

Probably millions of people in various parts of the UK; you do not seem to be able to understand that the country is made up of loads of different "housing markets", some will go up, some will go down. Much as you would love there to be a price drop on every single house in the country, you are living in la la land.

Everyone I've discussed this with in my area thinks prices around here are going up thanks to COVID-19, every cloud has a silver lining!

abanksee

MobileSaver said:

abanksee said:

Who outside of this forum thinks there wont be a drop of any kind?

Probably millions of people in various parts of the UK; you do not seem to be able to understand that the country is made up of loads of different "housing markets", some will go up, some will go down. Much as you would love there to be a price drop on every single house in the country, you are living in la la land.

Everyone I've discussed this with in my area thinks prices around here are going up thanks to COVID-19, every cloud has a silver lining!

Okay, just keep believing that.

Some will drop more than others, absolutely. But the vast vast majority will be going down.

I've just negotiated a 7.5% discount on a price agreed pre covid. Happy happy days.

Housing market isnt moving at all though, right?

JammyMatt

MobileSaver said:

JammyMatt said:

Personally, I would wait 12 months, but i guess i'm seriously risk averse 

Clearly you are, I could not imagine putting my life on hold for a year and living with parents for another year just on the hope that house prices may fall. But then I've always been a glass half full type of guy, some people will always be glass half empty.

Interesting point. Kind of swings both way though doesn't it? If a vendor refuses a low ball offer, are they just putting their life on hold? Surely it's better to take a 10% hit than risk putting your life on hold for any period of time? Worst case, the market doesn't drop but at least you wouldn't be on hold. 

abanksee

Chancellor has just said we will have a recession like people have never seen and it will have an impact on unemployment.

But no, house prices will stay the same!

ichicc

MobileSaver said:

ichicc said:

luckily for us, my parents don't live there, else we probably would be a lot more motivated to proceed with our existing deal!

You are obviously in a pretty unique and advantageous position compared to the vast majority of people; why do you want to move at all when you could just stay where you are living in a house owned by your parents?

It's a pretty small 1-bed in a not particularly nice area of London, and also isn't in an ideal location for traveling to where we work. We moved there specifically so that we could save more aggressively towards our first home. So moving out has always been the goal. With that said, our current living arrangements are workable, which is why we are comfortable walking away from our deal (although of course we'd prefer to reach a renegotiated offer with our seller).

I acknowledge that it's a very fortunate and somewhat unique situation to be in, but my original post was just to highlight that having no plans to sell does not make you immune to a collapsing market, if you need to remortgage during that period.

smub99

We are also in a similar position. We are FTBs and had been looking for over a year before we finally found a property that ticked most of our boxes. We were probably a week or two away from exchange when the lockdown happened. 

It’s such a difficult decision. On the one hand we have found a suitable house in an area we like and looking at Rightmove lately there is nothing new in that area. Given how much of a struggle it was to find the house in the first place, do we want to jeopardise the sale by trying to renegotiate. We are also renting for the last 7 years and are keen to finally get on the property ladder. On the other hand are we overpaying, when we have a 95% mortgage already, and several forecasts are suggesting a drop in prices later in the year. We want to remortgage after the 2 year fix and don’t want to be in negative equity, however unlikely it may be. I am acutely aware that having a high LTV leaves us a bit more susceptible to price changes. I think we would be happy with a 5% drop in the price, but wouldn’t know how to approach it in a reasonable way. 

Crashy_Time

MobileSaver said:

abanksee said:

Who outside of this forum thinks there wont be a drop of any kind?

Probably millions of people in various parts of the UK; you do not seem to be able to understand that the country is made up of loads of different "housing markets", some will go up, some will go down. Much as you would love there to be a price drop on every single house in the country, you are living in la la land.

Everyone I've discussed this with in my area thinks prices around here are going up thanks to COVID-19, every cloud has a silver lining!

I find it unlikely that millions of people actually believe that TBH, the negative drumbeat from the media is too strong. Who is buying the houses in your area to push prices up? The "different markets" thing only goes so far, banks tend to apply the same basic lending standards to all regions.

Getting_greyer

House prices will be booming in 12 months anyway. 

Ozzuk

smub99 said:

We are also in a similar position. We are FTBs and had been looking for over a year before we finally found a property that ticked most of our boxes. We were probably a week or two away from exchange when the lockdown happened. 

It’s such a difficult decision. On the one hand we have found a suitable house in an area we like and looking at Rightmove lately there is nothing new in that area. Given how much of a struggle it was to find the house in the first place, do we want to jeopardise the sale by trying to renegotiate. We are also renting for the last 7 years and are keen to finally get on the property ladder. On the other hand are we overpaying, when we have a 95% mortgage already, and several forecasts are suggesting a drop in prices later in the year. We want to remortgage after the 2 year fix and don’t want to be in negative equity, however unlikely it may be. I am acutely aware that having a high LTV leaves us a bit more susceptible to price changes. I think we would be happy with a 5% drop in the price, but wouldn’t know how to approach it in a reasonable way. 

When offering on the house we are currently buying we went in at 10% lower first, and finally agreed around the 5% mark - and tbh I'd have happily gone full price because the amount was worth it to me for the house and location etc and this is hopefully a very long term home.  So work out what is priority for you - getting a house, or saving potentially saving x amount, only you can decide that.  If you are happy to risk walking away, offer it, after all even I'll admit there is enough uncertainty around to justify trying (just not expect it like some others).

MobileSaver

JammyMatt said:

If a vendor refuses a low ball offer, are they just putting their life on hold? Surely it's better to take a 10% hit than risk putting your life on hold for any period of time?

Yes, sellers too are putting things on hold but of course to a much lesser extent. The seller is already on the "property ladder", is still paying their own mortgage rather than a landlord's and the seller is still in their own place where they can pretty much do whatever they want without having to ask permission from a landlord.

Often sellers moving up the ladder is very definitely a "Wouldn't It Be Nice If" choice rather than any imperative from still living with parents in your twenties or renting a bedsit in an undesirable part of town. Losing 10% because of a WIBNIF is something many sellers would not be prepared to do which is undoubtedly a factor in why transactions dropped by 50% the last time that house prices dropped significantly.