Worried about overpaying on house purchase

FTB_property

Hi, wondered if we could get some advice about a property we have an offer on.

We are first time buyers and have an offer accepted on a house for 150k. Asking price was 155k, but the house was previously on for more and then reduced. House had been on the market for approx a month when we offered and had no other offers, and only had 5 other viewings in addition to us. It is not in a necessarily popular area, on a main road, with a really hideous listed building opposite etc. which is why it seemed like a good price for the size of house. We have just recently discovered that the house directly next door to the one we have an offer accepted has been marketed and sold STC for 130k (OIEO). The square metre on this house is 114sqm, ours is a little bigger apparently 124sqm and there are some other small differences - the one we have an offer on is end terrace, the next door one is terraced, ours has two big bedrooms and two small (4 bed in total) whereas the one next door has 3 big bedrooms. From looking at photos they seem in similar decorative state. When the houses were originally sold 9-10 years ago the next door on sold for 125k and the house we're buying for 135k, only a 10k difference between them, now a 20k difference.

We really want to get on the property ladder, need the space but know this won't be our forever home and will probably move on in a couple of years hence are most concerned about the resale value more than anything else. Do you think we are getting too caught up in details by being concerned about this? Had survey done which gave the valuation of our offer price (150k).

Nearby sold prices:
-House we're buying (end terrace, 4 bed) sold for 135k in 2010 (new build)
-House next door (terraced, 3 bed, mentioned above) sold for 114k in 2016 and 125k in 2011 (new build)
-House two doors down (terraced, 3 bed, same as next door) sold for 124k in 2019 and 104k in 2011 (new build)
-House five doors up (end terrace, 4 bed, similar to the one we're buying, but some additional features like better views, better gardens, and has a conservatory) sold for 154k in 2017 and 150k in 2012 and 139k in 2010 (new build)
-House six doors up (same as next door to the one we're buying) sold for 107k in 2016 and 126k in 2010

princeofpounds

Well, assuming next door did actually sell for 130k, you are paying 15% more. Yours is apparently 9% larger (could be more or less - floorplans are rarely that accurate - but let's go with it) and an end terrace, giving you a whole extra aspect for light coming in, less noise, side access etc. That's easily worth another 5% or so.

It's impossible to comment on the historical sold prices in the area you mention because we have no idea where you are in the country - trends vary a lot in different regions. But there's nothing on there that looks particularly odd.

I'd relax if I were you. The survey agrees it's a reasonable price, so you aren't being stupid. You like the property (I presume!). 

pbhb

Houses prices are meaningless I’ve learnt. A house is worth what a buyer is willing to pay. If you are willing to pay £150k then the house is worth that. An end of terrace will always be far more desirable than a mid-terrace, well worth the extra money in my eyes. The valuation report also agrees with the price so I think it’s first time nerves clouding your potential excitement for the house 

AdrianC

How does the price compare to a slightly wider area?

Your surveyor is happy that £150k is a fair price for that property in that location in that condition... so why do you think he's wrong?

DayDreamerandGeneralWaster

I think it sounds feasible to be paying 20k more for a bigger four bed end if terrace.

SpiderLegs

OP is right to be concerned about resale value given what they’ve said.
The main factor however is unlikely to be the purchase price. It looks to be at top end but not unreasonable given the survey, size and comparables.

The issue here is that they are looking to move again in a couple of years. Therefore not building up much more additional equity and being more impacted by an uncertain economic environment.
I wouldn’t buy it in those circumstances.

The best mitigation to avoid resale issues in the short term is to overpay (or save) as much as possible in the period you do live there. If they can’t do that then they will have to accept that they may have to stay there longer than anticipated.

Crashy_Time

Right now is a bad time to buy if you are at all concerned about re-sale value IMO.

Angela_D_3

Buying a house should be a 5 year plan minimum or plan a way of ensuring you save the deposit for the next house without relying on the equity from the first and keep hold of each house on the climb up the ladder then sell them all at the end when you know which one you want to die in.  That truly is the way to do it 

Neil49

Is this the right house to buy if you plan to move again in 2 years? The cost of moving house is considerable and next time around you won't be first time buyers so will encounter quite a high cost in various taxes and charges. 

With regards to the price an end terrace is a much better option than mid so I can see where the price difference comes from but from what you say it doesn't sound like a very saleable property and you may take a hit if you are in a rush to sell 2 years down the line. 

AdrianC

Crashy_Time said:

Right now is a bad time to buy if you are at all concerned about re-sale value IMO.

When, IYHO, was the last good time to buy?

Crashy_Time

Angela_D_3 said:

Buying a house should be a 5 year plan minimum or plan a way of ensuring you save the deposit for the next house without relying on the equity from the first and keep hold of each house on the climb up the ladder then sell them all at the end when you know which one you want to die in.  That truly is the way to do it 

Tax burden on property hoarders going forward will make that a no no for most, and also most people ARE relying on the "equity" to keep moving up, that is how a ponzi/borrowing scheme works!