Offer under asking price

Sarah1Mitty2

TonyTeacake said:

Sarah1Mitty2 said:

mi-key said:

Readyto said:

Last year I offered 100k below asking price and sadly I lost on that house  

I wonder why Well unless you are talking about something in the millions !

Last year is a very different market, PropertyLog is full of 100k reductions, and not on million pound houses either, most people don`t know how to price correctly in my opinion.

I totally agree we are in a totally different market now but unfortunately, there are many sellers who still think they can achieve last year's prices. Some of the commentators on MSE have said you can get a mortgage rate of under 4%, but fail to mention you will only get this rate with a 33% deposit, this means most FTB are priced out of the market and payments on mortgages in the last 12 months have gone up by 1/3. 

Yes, that is the important bit that people often miss out, for whatever reason............good spot pointing that out.

MobileSaver

TonyTeacake said:

Sarah1Mitty2 said:

mi-key said:

Readyto said:

Last year I offered 100k below asking price and sadly I lost on that house  

I wonder why Well unless you are talking about something in the millions !

Last year is a very different market, PropertyLog is full of 100k reductions, and not on million pound houses either, most people don`t know how to price correctly in my opinion.

I totally agree we are in a totally different market now but unfortunately, there are many sellers who still think they can achieve last year's prices.

Er, maybe that's because they can? A friend of mine put their house on the market almost a year ago and just completed last week at the same full asking price...

TonyTeacake said:

Some of the commentators on MSE have said you can get a mortgage rate of under 4%, but fail to mention you will only get this rate with a 33% deposit, this means most FTB are priced out of the market

A typical FTB will have at least a 15% deposit and can currently get a 5 year fix at 4.2%, most of us here who have had mortgages will think that's a pretty good deal!

[Deleted User]

Remember that it's 4.2% of a much larger sum than you paid for your first house.

FTBs are screwed in so many ways these days, it's hard to count them all. A lot of what they can afford is a scam.

Sarah1Mitty2

MobileSaver said:

TonyTeacake said:

Sarah1Mitty2 said:

mi-key said:

Readyto said:

Last year I offered 100k below asking price and sadly I lost on that house  

I wonder why Well unless you are talking about something in the millions !

Last year is a very different market, PropertyLog is full of 100k reductions, and not on million pound houses either, most people don`t know how to price correctly in my opinion.

I totally agree we are in a totally different market now but unfortunately, there are many sellers who still think they can achieve last year's prices.

Er, maybe that's because they can? A friend of mine put their house on the market almost a year ago and just completed last week at the same full asking price...

TonyTeacake said:

Some of the commentators on MSE have said you can get a mortgage rate of under 4%, but fail to mention you will only get this rate with a 33% deposit, this means most FTB are priced out of the market

A typical FTB will have at least a 15% deposit and can currently get a 5 year fix at 4.2%, most of us here who have had mortgages will think that's a pretty good deal!

The house the OP is talking about failed to do that though and came back to market, as no doubt did thousands of other properties, one sale in your village isn`t representative of the wider market, maybe your friend priced competitively? You got a 40% discount yourself didn`t you when you bought your house?

TonyTeacake

MobileSaver said:

TonyTeacake said:

Sarah1Mitty2 said:

mi-key said:

Readyto said:

Last year I offered 100k below asking price and sadly I lost on that house  

I wonder why Well unless you are talking about something in the millions !

Last year is a very different market, PropertyLog is full of 100k reductions, and not on million pound houses either, most people don`t know how to price correctly in my opinion.

I totally agree we are in a totally different market now but unfortunately, there are many sellers who still think they can achieve last year's prices.

Er, maybe that's because they can? A friend of mine put their house on the market almost a year ago and just completed last week at the same full asking price...

TonyTeacake said:

Some of the commentators on MSE have said you can get a mortgage rate of under 4%, but fail to mention you will only get this rate with a 33% deposit, this means most FTB are priced out of the market

A typical FTB will have at least a 15% deposit and can currently get a 5 year fix at 4.2%, most of us here who have had mortgages will think that's a pretty good deal!

4.2% might sound like a low interest rate but in the context of house prices today it is very expensive for many FTB. Based on your assumption most FTB have a 15% deposit that would be a payment of £1400 a month based on a mortgage of £255,000 which is £400 higher in comparison to 12 months ago. Factor in the cost of living crisis with all the lay offs happening I think you know which way the market is heading.

youth_leader

My husband and I had a 100% mortgage in the late 80's at 14% on £66K and even with my Mum helping out occasionally, we struggled.  I remember walking the eight miles to work and back for a week because I didn't have the money for a new car tyre.  And then my Dad turned up with a remould!  My daughter will be buying this year, I will be helping her out as much as I can financially.

[Deleted User]

youth_leader said:

My husband and I had a 100% mortgage in the late 80's at 14% on £66K and even with my Mum helping out occasionally, we struggled.  I remember walking the eight miles to work and back for a week because I didn't have the money for a new car tyre.  And then my Dad turned up with a remould!  My daughter will be buying this year, I will be helping her out as much as I can financially.

Sounds great, lots of FTBs today would jump at that deal. £66k in 1988 is only £168k today. Average house price is getting on for double that. Very affordable compared to what people are faced with now.

mi-key

[Deleted User] said:

youth_leader said:

My husband and I had a 100% mortgage in the late 80's at 14% on £66K and even with my Mum helping out occasionally, we struggled.  I remember walking the eight miles to work and back for a week because I didn't have the money for a new car tyre.  And then my Dad turned up with a remould!  My daughter will be buying this year, I will be helping her out as much as I can financially.

Sounds great, lots of FTBs today would jump at that deal. £66k in 1988 is only £168k today. Average house price is getting on for double that. Very affordable compared to what people are faced with now.

Not really, average wage in the late 80s was £14,000 a year, now it is £38,000 ( and there was no minimum wage either ). Average house price now is £281K and mortgage rates are a lot lower than in the late 80s. Even in 1998 it was double what it is now.

mi-key

A typical FTB will have at least a 15% deposit and can currently get a 5 year fix at 4.2%, most of us here who have had mortgages will think that's a pretty good deal!

4.2% might sound like a low interest rate but in the context of house prices today it is very expensive for many FTB. Based on your assumption most FTB have a 15% deposit that would be a payment of £1400 a month based on a mortgage of £255,000 which is £400 higher in comparison to 12 months ago. Factor in the cost of living crisis with all the lay offs happening I think you know which way the market is heading.

I bought my first house 16 years ago. The mortgage rate at the time was 6% and my monthly payments were just over £1100. The house was just a few thousand over the average price for that year. 

FTBs wages have increased a lot in 16 years. Yes it is more expensive to buy than it was 12 months ago, but it's not that much different than it has ever been considering the rates were unusually low then

MobileSaver

[Deleted User] said:

Remember that it's 4.2% of a much larger sum than you paid for your first house.

Of course but they are also earning a much larger sum than I was when I bought my first house and just as pertinently they are almost certainly buying a much better house too...

A huge number of FTBs buy brand new new-builds with shiny new appliances whereas my first house had no double glazing, no central heating, no proper kitchen and the only bathroom had to be accessed through the bedroom; few if any FTBs buy such properties today.

Sarah1Mitty2 said:

as no doubt did thousands of other properties, one sale in your village isn`t representative of the wider market, maybe your friend priced competitively?

Of course but by the same token claims that the housing market is "full of £100k reductions" clearly isn't representative either!

My friend's house was priced higher than I'd have paid given it had no garden to speak of but it is a very desirable area. Their village is quintessentially British, much posher than my village. Many residents are old money; lords and ladies, wealthy landowners, one of Boris Johnson's relatives lives there and an ex-Director-General of the BBC has a property in the village too.

Sarah1Mitty2 said:

You got a 40% discount yourself didn`t you when you bought your house?

I paid 40% less than the initial asking price but that's very different to getting a 40% discount and just goes to show how meaningless asking prices are. It was also a seven-figure house bought in my forties so hardly representative of a FTB... and it was a decade ago!