Afraid of price ceiling on extended property

GaryL84

After we failed to reach an agreement regarding completion dates and long stop dates with the vendor of our original property, we have been looking around for alternatives. 

We've found a semi-detached house on a reasonably quiet cul-de-sac which was extended in the late 00's, taking it from a 3 bed, 1 reception, 1 bath, to a 4 bed, 3 reception 3 bath.  Its completed to a high standard and from my initial checks on the council planning site everything to do with the extention was approved.

The concern I have is that its not in an especially highly desirable area, not many houses in the postcode have sold recently (i.e in the last 10 or so years) but of those that did most recently a 3 bed spec like the original build, went for just £133k in 2018. Zoopla still see our prospective property as the 3 bed, pre-extension spec with a price estimate of £152-£186k yet the asking price is £220k.  The highest value property on the street is valued at £213-£260k but is a much larger, 4 bed detached property and was listed at £180k in 2015 but failed to sell.  Everything else struggles to hit a valuation over £160-£180k. 

Whilst the work done is to a high standard and it means we wouldnt have to do any decorating or rennovation at all for the forseeable future, I do worry about future resale prices and whether at £220k the valuation is a product of the market and not a true valuation of the property and its location.  Compared to other properties of the same standard in other areas we've seen, £220k seems reasonable.. We both really like the house and feel its a good, future-proof fit for us, but the potential ceiling for the area worries me. Am I being paranoid?

gwynlas

If you intend living in the house for a long time you cannot worry about future values but go on the surveyors valuation regarding current price. It might be that with the current house sets a benchmark for the street and other properties might be extended in the same way and reach similar values. What is most important is that the house suits your needs and affordability at this time.

Gavin83

I learned a lot buying a house but I still never got my head around the concept of ceiling prices or why it exists. Ultimately someone has to have the most expensive house in the street and if you have a 5 bed detached in a street filled with 3 bed semis yours will clearly still be worth more than the others.

Gavin83

I learned a lot buying a house but I still never got my head around the concept of ceiling prices or why it exists. Ultimately someone has to have the most expensive house in the street and if you have a 5 bed detached in a street filled with 3 bed semis yours will clearly still be worth more than the others.

thegreenone

I wouldn't put much store into Zoopla guesstimates.  As my neighbours found out when they sold for £90k less than Zoopla suggested.  We'd be laughing First Class to the Caribbean, frequently, if we sold at Zoopla prices.

If the house suits you and a surveyor says it's worth it, go for it.

theoretica

How crucial to you is the future sale price?  I mentally divided the price I paid for my home into two - most of it was what the house was 'worth' - but like many buyers I thought I was perhaps overpaying a bit by that criteria.  However, mentally seeing the rest of the purchase price as a premium I was happy to pay to live where I wanted to helped me make peace with that. I would rather put my discretionary spending to where I live everyday than fancier car or more expensive holidays.

davilown

A lack of sale prices can indicate it being a better area than you may suppose - people not moving would mean they like living there (my opinion of course!)

lookstraightahead

I have never really considered resale price of my homes. Mainly because I cannot read into the future. Op I do think in recent years where purchasers have never seen prices going down, there is this expectation that you will always make money on your house. Perhaps over a very long term yes that is true, but you should never see your house as a money tree. See it as your home.
if you set your repayments while interest rates are so low, you are benefitting straight away. Imagine them at 15%!

There are too many what ifs - sk be have bought beautiful houses with countryside views to have factories / wind turbines / vast estates built on them. Others have bought modest homes to have an excellent school built in the catchment etc.

Choose your home for what it is to you, and if you make money on it, it's a bonus.