house down valued - confused

Mickey666

Crashy_Time said:

MobileSaver said:

green_pea_2 said:

MobileSaver said:

green_pea_2 said:

there's no way I'm pumping my savings into this purchase - especially if a surveyor has explained they have plenty of very recent comparable data to show we're definitely overpaying.

Presumably your answer is that there are currently comparable homes in that location that are cheaper? In which case my next question would be why did you choose the property with the "optimistic valuation"... ?

Because they sold 2-3 months ago and I don't have a time machine

You see, if I'm perfectly honest, that's exactly what I thought you would say!

Prices are calculated based on supply and demand so if demand stays the same or increases (as it is currently) and supply decreases (as it is currently since the comparative properties have already sold) then prices will rise. It's basic economics and so it's hard to understand how that is "definitely overpaying".

Fundamentally, like pretty much everything in life, if something is in short supply but you want it then you typically have to pay more for it...

Of course, you may get lucky and the seller for their own reasons negotiates an acceptable deal with you but you do need to consider what your options are if a deal can't be reached. Similarly, an equally nice house in a great location, and in good condition, really cute inside and lovely garden may come on to the market at a better price next week, who knows.

Just be aware that one poster on this thread has continued renting and paying his landlord's mortgage instead of his own for at least seven years because he's not been prepared to pay market prices, are you happy to do the same?

The recent spike in prices is because people who couldn`t afford to pay stamp duty are being allowed to ignore stamp duty to get into mortgage debt they won`t be able to afford if mortgage rates rise.

Current average house price in UK is £267k and without the current SDLT holiday, the payable SDLT would be £3,350.

Even the maximum possible saving of £15k is only possible on a £500k house.

Are these relatively small sums of money REALLY the reason for the recent spike in house prices, when they are MORE than the SDLT savings themselves?

Also, being pedantic, we don't yet know if the recent 'spike' in prices is really a spike at all because that would imply a subsequent price drop, which is currently just speculation.  I can certainly imagine a drop in transactions when the SDLT holiday ends, though I'm less sure about prices dropping back to the pre-holiday levels.  But I guess we'll know by the end of the year.

getmore4less

April transactions are still ~20% above long term.
Year on year cought up March so most of the 2020 slump has been absorbed heading into overshoot.

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above

Scotbot

Crashy_Time said:

MobileSaver said:

green_pea_2 said:

MobileSaver said:

green_pea_2 said:

there's no way I'm pumping my savings into this purchase - especially if a surveyor has explained they have plenty of very recent comparable data to show we're definitely overpaying.

Presumably your answer is that there are currently comparable homes in that location that are cheaper? In which case my next question would be why did you choose the property with the "optimistic valuation"... ?

Because they sold 2-3 months ago and I don't have a time machine

You see, if I'm perfectly honest, that's exactly what I thought you would say!

Prices are calculated based on supply and demand so if demand stays the same or increases (as it is currently) and supply decreases (as it is currently since the comparative properties have already sold) then prices will rise. It's basic economics and so it's hard to understand how that is "definitely overpaying".

Fundamentally, like pretty much everything in life, if something is in short supply but you want it then you typically have to pay more for it...

Of course, you may get lucky and the seller for their own reasons negotiates an acceptable deal with you but you do need to consider what your options are if a deal can't be reached. Similarly, an equally nice house in a great location, and in good condition, really cute inside and lovely garden may come on to the market at a better price next week, who knows.

Just be aware that one poster on this thread has continued renting and paying his landlord's mortgage instead of his own for at least seven years because he's not been prepared to pay market prices, are you happy to do the same?

The recent spike in prices is because people who couldn`t afford to pay stamp duty are being allowed to ignore stamp duty to get into mortgage debt they won`t be able to afford if mortgage rates rise.

And the fact many people have saved shed thousands over the past year, unable to go out or travel. I recently checked how much I spent lasI year, I was shocked. I saved over 10k and I live alone, imagine how much families must be saving.

Those who work in secure jobs are pretty flush right now. I plan to spend mine upgrading my property but I can't find a builder for love nor money

MobileSaver

Crashy_Time said:

green_pea_2 said:

We do have some cash yes, but I'm not inclined to pump my savings into this purchase.

Yes, that could be regretted later on.

Can you imagine how much regret the OP would have if they'd listened to you when you joined this site and had then spent the last seven years paying a landlord's mortgage instead of their own?

Crashy_Time said:

The recent spike in prices is because people who couldn`t afford to pay stamp duty are being allowed to ignore stamp duty to get into mortgage debt they won`t be able to afford if mortgage rates rise.

That is completely untrue and you know it.

Firstly and most importantly, for years now lenders have had a legal obligation to ensure borrowers can afford much higher mortgage rates than the rate they initially signed up to.

Secondly, you yourself stated that no-one can predict when or if mortgage rates might rise so it may well be ten years from now before that happens.

Thirdly, borrowers can fix their rate for anything from 2, 5, 10 years or even longer so all other things being equal they will easily be able to afford any mortgage rate rise.

Fourthly, your assertion "people who couldn`t afford to pay stamp duty" is pure speculation on your part and the figures involved are tiny in the grand scheme of things.

BikingBud

MobileSaver said:

Firstly and most importantly, for years now lenders have had a legal obligation to ensure borrowers can afford much higher mortgage rates than the rate they initially signed up to.

Do you think that has any greater long term validity than an MOT. "It was all ok when did the test guvnor".

The system is about protecting itself, "regulation told us to, so we did, not our fault as the mortgage provider......"

Once agreed, post stress test, the mortgagee may have any of a vast number of enforced or lifestyle choice changes, especially as 35/40 years seems to be growing in popularity, that will directly affect their ability to pay. 
 We will only know once things move away from this lovely low-stress, high-value market where the true pain will be felt. It may carry on for another 10 years or more but when you compound multiple debts and push them to the right you really do need a plan for when the tally man comes.

Many trusting the system to protect them may not have carried out their own due diligence, we see it from the "accidental landlords" and the "interest only prisoners" where it's always someone else's fault.  

MobileSaver

BikingBud said:

MobileSaver said:

Firstly and most importantly, for years now lenders have had a legal obligation to ensure borrowers can afford much higher mortgage rates than the rate they initially signed up to.

Once agreed, post stress test, the mortgagee may have any of a vast number of enforced or lifestyle choice changes, especially as 35/40 years seems to be growing in popularity, that will directly affect their ability to pay.

I do agree with you, no system is perfect and a small number of people will fall foul of the system whether from bad decisions or life-changing events through no fault of their own.

However, for the vast majority of people, taking on a mortgage to buy your own home will be the best financial decision you ever take.

Ultimately everyone has to live somewhere and pretty much the only two choices are pay your own mortgage and eventually own your home outright or pay your landlord's mortgage for the rest of your life...

The_Real_Cheddar_Bob

user1977 said:

Both the surveyors have valued the house in its current condition, so no, it's not really legitimate to take that value and then knock even more off it to fix the problems they've found.

legitimate? Wow. No one cars about legitimacy when buying property, If you do, then you are a fool with money. 

OP offer them less in cash, if they don't take it, walk away. There will always be another property, do not get sucked in by the "must have this one"

PS - edit rather than additional post, I wouldn't entertain remotely trusting estate agents. Number of buyers, number of offers, who is best, its all BS. Their only goal is to sell the property, their second goal to sell it for as much as they can, but that comes after goal 1, to sell. 

Crashy_Time

BikingBud said:

MobileSaver said:

Firstly and most importantly, for years now lenders have had a legal obligation to ensure borrowers can afford much higher mortgage rates than the rate they initially signed up to.

Do you think that has any greater long term validity than an MOT. "It was all ok when did the test guvnor".

The system is about protecting itself, "regulation told us to, so we did, not our fault as the mortgage provider......"

Once agreed, post stress test, the mortgagee may have any of a vast number of enforced or lifestyle choice changes, especially as 35/40 years seems to be growing in popularity, that will directly affect their ability to pay. 
 We will only know once things move away from this lovely low-stress, high-value market where the true pain will be felt. It may carry on for another 10 years or more but when you compound multiple debts and push them to the right you really do need a plan for when the tally man comes.

Many trusting the system to protect them may not have carried out their own due diligence, we see it from the "accidental landlords" and the "interest only prisoners" where it's always someone else's fault.  

Exactly