Offer under asking price

MobileSaver

[Deleted User] said:

MobileSaver said:

[Deleted User] said:

Just looking locally, there are some houses that were new build 10 years ago. £200k initial sale, now on for £300k. No way wages have kept up with that.

I'm sure you're right but so what? Indeed I'm sure wages haven't kept up with lots of things in recent times but it is what it is.

If lamb steaks are too expensive at Tesco then you can either

1. Buy a cheaper product, or
   
2. Compromise financially elsewhere so you can afford what you want, or
   
3. Refuse to buy until the the price comes back down and go without in the meantime

It's exactly the same with property and yet, despite wages not keeping up with prices, well over one million people are managing to buy a house every single year...

So unlike a lamb steak that is a luxury you can live without, everyone needs a roof over their head. Due to human biology they need to have children when they are young too. There is a limit to how cheap they can go, especially as FTBs who are stretched to the limit then won't have the money to fix up a complete wreck.

Everyone needs a roof over the head but no-one needs to buy, they can rent instead and not have to worry about affording tens of thousands in deposit.

Similarly if they do want to buy then they don't need a £300k luxury house but in most places can buy a £200k house instead. Part of the problem is the sense of entitlement of the younger generation that they want and expect a nice house in a nice area the same as their parents without comprehending that their parents probably took decades to get to that point in their lives.

Most of us didn't have the money to fix up a complete wreck when we were younger but we managed and made it work by doing what we could afford when we could afford; today's generation want everything done right now with the least effort for themselves but then complain that it costs too much...

[Deleted User] said:

The gap between asking and completion prices is massive too.

That chart is clearly not accurate and cannot possibly be comparing like with like; common sense must tell you that the average house is not sold for £100k less than it's initial asking price! (Even if the HPC crowd would love to claim otherwise. )

MobileSaver

TonyTeacake said:

Here are the hard facts. 

Let us see where we are at Christmas as I would love to hear the excuses from certain commentators on here

LOL. We won't have to wait until Christmas to see how wrong some of your so-called "hard facts" are!

By the way, we're still waiting to hear which areas are going to see 50% price drops but you still seem reluctant to answer; the truth is that you don't really believe that yourself do you?

YoungBlueEyes

MobileSaver said:

<snip>

Part of the problem is the sense of entitlement of the younger generation that they want and expect a nice house in a nice area the same as their parents without comprehending that their parents probably took decades to get to that point in their lives.

Most of us didn't have the money to fix up a complete wreck when we were younger but we managed and made it work by doing what we could afford when we could afford; today's generation want everything done right now with the least effort for themselves but then complain that it costs too much...

^^^ This, with bells on. 

Some people won’t even consider compromising or making do. There’s no notion of working your way up to something. 

I had to move a few years ago, what I really wanted was to stop in the immediate area. But I couldn’t afford it. Not even close. So I put my big girl pants on, moved to a cheap bit of a cheaper county and got on with my life. 

I know there are plenty of people who can’t do that, but I bet there’s a bladdy lot more that just won’t. 

jimbog

TonyTeacake said:

mi-key said:

TonyTeacake said:

RelievedSheff said:

mi-key said:

The 100k figure is well out of date now, and as the thread is about offering under asking, and you went in 40% under asking I assume you fully encourage the OP to do the same, not necessarily at such a high % though?

Once again crashy comes in with their completely imaginary data, desperately hoping it means the market is crashing..

He will be disappointed by newssuch as this then:

https://www.zoopla.co.uk/discover/property-news/mortgage-rates-fall-below-4-for-lower-loan-to-value-mortgages/

I wouldn't get to excited by the Zoopla article has interest rates are still over double to what they where over 12 months ago.

Here is a snippet from the article.

Average rates for new mortgages are starting to fall back quickly. Bank of England data for January 2023 shows the average rate for a new 75% loan-to-value 5-year fix is 4.8% and on a clear downward trend.

Also snippets from the same article you failed to mention :

The cheapest rates are starting to emerge at below 4% for people staying in their homes and remortgaging with smaller loans. This is a major improvement to the 6% average last November.

Average UK mortgage rates are likely to settle in the 4% to 5% range in the coming months. This is certainly higher than recent years but still relatively cheap compared to historic levels for mortgage rates.

House price growth stalled in in the final quarter of 2022 and while sellers are taking bigger discounts of up to 4% to achieve sales, it looks very unlikely that homeowners are facing a major house price re-correction in the year ahead. 

The good news is that lower mortgage rates will reduce the hit to buying power for households looking to move home. In turn, this will limit the downward pressure on home prices in 2023.

That's funny as I was listening to LBC radio last week and they where inadated with calls from people whose mortgages where up for renewal and they couldn't afford the new rates. 

Not surprising. Only those who can't would have rung in to say they they can't?

jimbog

[Deleted User] said:

Aberdeenangarse said:

arthurdick said:

TonyTeacake said:

That's funny as I was listening to LBC radio last week and they where inadated with calls from people whose mortgages where up for renewal and they couldn't afford the new rates. This is what happens when people overpay for houses and interest rates go up.

Oh and I nearly forgot to mention we have rampant inflation which we didn't have 2 years ago.

Not sure how old you are but the previous crashes took at least 2 years or more before we seen the bottom of the market.  This crash will be between 20-50% depending on where you live.

I am old enough to remember the last crash, I wasn't  looking to sell or buy at the time, had a house with a tiny £21000  mortgage on it, so really didn't pay attention to it.  I am also old enough to remember interest rates at 15%, great times for me, I had £60000 in the Chelsea building society  in Lewisham for a year at least and when I took in my passbook to be updated, I had a nice £9000 given to me, which more than made up for the higher mortgage payments.

Could you please tell me more about this crash please, I am inbetween properties at the moment and the areas I am struggling to buy in are around Blackheath and Greenwich, will these be any of the areas getting this big crash, I hope so, I will hang on for a little bit until you give me the heads up, cheers.

Daily Telegraph have a tracker.

https://www.telegraph.co.uk/money/house-prices-data-tool-forecast-interest-rates-markets/

This graph is even more interesting:





The gap between asking and completion prices is massive too.

Looking at your graphs - proportionally much less difference now 

tooldle

TonyTeacake said:

Looking at some of the replies I would like to apologize if I kept anyone from sleeping last night.

Here are the hard facts. 


4. Layoffs have started and unfortunately will get a lot worse.



I'm afraid far too many people live in an economic fantasy world and try to pretend it will just go away. Interest rate hikes were always going to be damaging for many people and I am not just talking about mortgages, we have credit cards, car loans, bank loans, etc.

How are you measuring 'lay offs'. I work in an environment where funding is fixed term (EU structural funds being an example). Hence, some 'employers' will have a churn of employees as existing funding ends and new opportunities open up (not necessarily employing the same people in the same institution). This does not spell disaster for the sector or indicate the business is in poor shape.

There will always be some people who are more exposed than others. Some for reasons outside of their own control. My employer is offering 5-10% pay increase. The higher uplift going to the lowest paid. The offer has been rejected and the dispute is ongoing.

TonyTeacake

Layoffs For the 4th quarter of 2022 just in the UK were at the highest since 2008. A lot of tech jobs are disappearing at an alarming rate. (Plenty of commentators on here last year saying their tech jobs were immune from a downturn).
The thing is because some people are doing well financially it doesn't mean everybody else is and that is a fact in the current market.

In reply to the comment from RelieveSheff saying "Erm. So far nothing that you said early last year has happened!
Inflation will come down substantially in April once energy prices have been factored into the 12 month period and falling fuel prices start to come into account. This is a given". 

The funny thing is I remember you saying early last year that inflation will be a minor blip and interest rates won't rise much. I warned you inflation will only get worse and interest rates will go higher which you dismissed. I also warned you that house prices will peak in early summer and looking at the Land Registry it looks like I was correct on this one. I also warned you about the layoffs which we are seeing all over the place.

A Housing crash always plays out in slow motion and it is going to take at least 2-3 years before we see the bottom.
But I am sure when this happens you will deny that I have ever predicted this. 

RelievedSheff

The current rate of inflation is a blip. This time last year inflation was 5.5%. It is currently 10.1% but will drop to around 5-6% if not lower in the next month or so when current high energy and fuel prices hit the 12 months mark and drop off the calculation.

By the end of the year inflation will be lower still. Current forecasts are around 4-4.5%.

One year of high inflation is hardly sustained inflation. It is just a blip and is the same as is being played out across the world right now.

Would you care to show any evidence of these mass "lay-offs" that you keep banging on about. Government figures seem completely at odds with what you claim:

https://commonslibrary.parliament.uk/research-briefings/cbp-9366/

TonyTeacake

RelievedSheff said:

The current rate of inflation is a blip. This time last year inflation was 5.5%. It is currently 10.1% but will drop to around 5-6% if not lower in the next month or so when current high energy and fuel prices hit the 12 months mark and drop off the calculation.

By the end of the year inflation will be lower still. Current forecasts are around 4-4.5%.

One year of high inflation is hardly sustained inflation. It is just a blip and is the same as is being played out across the world right now.

Would you care to show any evidence of these mass "lay-offs" that you keep banging on about. Government figures seem completely at odds with what you claim:

https://commonslibrary.parliament.uk/research-briefings/cbp-9366/

I have taken a snapshot of the screen with you saying "It is currently 10.1% but will drop to around 5-6% if not lower in the next month or so when current high energy and fuel prices hit the 12 months mark and drop off the calculation." 

This is from Ofgem "From 1st April 2023, prices are predicted to rise by 20% on average, meaning the energy bills for a typical household will increase" 

Also, The government has confirmed it will continue to subsidize businesses' energy costs until 31 March 2024, but said the rate of support will be reduced from April 2023. 

Good luck with your forecasts because this would be great news for the many businesses I deal with, but somehow I cannot see inflation dropping as quickly as you think. You keep following The BOE predictions because we all know according to Andrew Bailey inflation would be transitory. That is what he said early last year. As for BOE predictions you'd get a more accurate prediction from throwing a dart at a dartboard while being blindfolded.

I have also taken a snapshot of my predictions from here so when we see it fully play out nobody can deny I have said this which seems to be a trend on here.

linda.b_4

Thanks to everyone wishing me luck. It’s worked as our offer has been accepted! 

Happy with the price and don’t intend moving for quite a few years. If the value drops then so will the price of the onward purchase. Renting has got us into the area we want to live but we are ready to have a home where we can do as we please re home improvements. We can’t even hang curtains or pictures in this rental.
Cheers again all.