Fantasists?

[Deleted User]

StevenB12 said:

We have a large contract with a company who will buy houses that have suffered subsidence damage etc.

Long story short, this company bought 18 houses which had suffered subsidence damage, new builds, had all been bought and lived in. They bought them after arranging a price for all of them with the home builder and each owner got paid a percentage and put up in hotels etc. 

We've just finished some work on one house, 3 bedrooms, terraced, small garden, small kitchen, small bedrooms etc. It was bought for 94k in 2020, it has now just been sold for £198k

3 other residents of the homes that were rebuilt have also just sold up for over £100k more than they were bought for...yet the undamaged properties in the estate, have all remained at the same valuations apparently. 

Is that something to do with the subsidence? The ones that have been repaired are presumably guaranteed now, so getting insurance on them should be reasonable. The others in an area that suffers from subsidence and which have not been secured against it are likely to be an issue for lenders as well as insurers.

Basically the people who bought them and then DIDN'T see subsidence have been screwed.

[Deleted User]

aoleks said:

Cornish_mum said:

Sorry haven’t read whole thread, but it’s really unhelpful to look at previous sold prices, as so many factors influence the individual sales price.

For example I know we paid too much for our current house by ~30k but we did it knowingly because of our personal situation; relocation for my husbands new dream but stressful job(with golden hello payment), second baby on the way and very specific location/time criteria to get our eldest into the local primary to start reception and thus not have to pay school fees. The value of the property to us because of the other factors was more than its real market value. As we saved a fortune in rent and school fees by paying too much for our house and my husband was able to make the best of his new job which lead to him being promoted etc.

We had just lost out on a better property (extra bedroom and bathroom in loft conversion) on the same road as we eventually bought on which sold for 75k under market value (it went to sealed bids - 8 people bid for it). The vendors took a lower bid from a cash buyer (downsizing) as they needed to proceed quickly with the sale or risk losing out on their purchase. They called me to apologise for not taking our bid and explained why!

On previous transactions it looks like our house is worth more than the other one but it’s not. It’s just reflected individual circumstances.

Houses are illiquid unique assets and only worth what someone will pay and what a vendor will accept.

CM

but this is exactly the point many of us are making here:

THIS is the market. the couple expecting a baby and wanting to move regardless. the individual who won the lottery and wants to pay £20k "over" for that quirky fireplace. the FTBer who is simply fed up with yearly rent increases, biting the bullet to buy a house at a "higher" price.

there's no such a thing as "overpaying", because that implies everything is predictably priced, linear. it's literally what people are willing to pay for something.so when people see a house for sale and take the calculator out, they're oblivious to real life. you can't take the percentage increase, apply it to the last transaction and voila, there's your price. it's not!

You certainly can overpay, because you forgot one key component of this equations: lenders.

Anyone who needs a mortgage will need to get the property valued by the lender, and if it comes in lower than what they want to pay they will have to make the difference from cash. So that FTB may have no choice because they simply don't have the money.

That used to keep prices at least somewhat sane, but the rise of buy-to-let, parental assistance, and so forth has increased the number of cash buyers and mortgages buyers who large deposits.

BobT36

Slinky said:

The sad thing is though, judging by the viewings it appears that we are only going to be getting older people moving in, as younger ones don't have the money.

Aye, younger (or even middle aged) people not having over half a million quid (or even 650k+) to drop on a 3 bed or small bed should be no small wonder...

Are the only people buying these houses either extremely over-leveraged, or older people with massive amounts of equity? 
Both me and my lass have fantastic, well paid jobs and have been saving all our lives, yet could no-where near afford that much (even though the silly banks are willing to lend it). 

jimbog

[Deleted User] said:

aoleks said:

Cornish_mum said:

Sorry haven’t read whole thread, but it’s really unhelpful to look at previous sold prices, as so many factors influence the individual sales price.

For example I know we paid too much for our current house by ~30k but we did it knowingly because of our personal situation; relocation for my husbands new dream but stressful job(with golden hello payment), second baby on the way and very specific location/time criteria to get our eldest into the local primary to start reception and thus not have to pay school fees. The value of the property to us because of the other factors was more than its real market value. As we saved a fortune in rent and school fees by paying too much for our house and my husband was able to make the best of his new job which lead to him being promoted etc.

We had just lost out on a better property (extra bedroom and bathroom in loft conversion) on the same road as we eventually bought on which sold for 75k under market value (it went to sealed bids - 8 people bid for it). The vendors took a lower bid from a cash buyer (downsizing) as they needed to proceed quickly with the sale or risk losing out on their purchase. They called me to apologise for not taking our bid and explained why!

On previous transactions it looks like our house is worth more than the other one but it’s not. It’s just reflected individual circumstances.

Houses are illiquid unique assets and only worth what someone will pay and what a vendor will accept.

CM

but this is exactly the point many of us are making here:

THIS is the market. the couple expecting a baby and wanting to move regardless. the individual who won the lottery and wants to pay £20k "over" for that quirky fireplace. the FTBer who is simply fed up with yearly rent increases, biting the bullet to buy a house at a "higher" price.

there's no such a thing as "overpaying", because that implies everything is predictably priced, linear. it's literally what people are willing to pay for something.so when people see a house for sale and take the calculator out, they're oblivious to real life. you can't take the percentage increase, apply it to the last transaction and voila, there's your price. it's not!

That used to keep prices at least somewhat sane, but the rise of buy-to-let, parental assistance, and so forth has increased the number of cash buyers and mortgages buyers who large deposits.

Exactly this. 'Overpaying' implies it's over the price that it's 'worth' but the fact that there are people willing and able to pay it shows what indeed it's worth  

mi-key

Exactly this. 'Overpaying' implies it's over the price that it's 'worth' but the fact that there are people willing and able to pay it shows what indeed it's worth  

Very true. The only way you can say a house is being sold for more than it is 'worth' is if there are two identical properties, exactly the same in every respect, and one is priced higher than the other. As this very rarely happens, it comes down to way a buyer will pay. As very few houses listed never sell, then there is always someone who will pay a price that a seller considers to be what the house is worth.

lookstraightahead

jimbog said:

[Deleted User] said:

aoleks said:

Cornish_mum said:

Sorry haven’t read whole thread, but it’s really unhelpful to look at previous sold prices, as so many factors influence the individual sales price.

For example I know we paid too much for our current house by ~30k but we did it knowingly because of our personal situation; relocation for my husbands new dream but stressful job(with golden hello payment), second baby on the way and very specific location/time criteria to get our eldest into the local primary to start reception and thus not have to pay school fees. The value of the property to us because of the other factors was more than its real market value. As we saved a fortune in rent and school fees by paying too much for our house and my husband was able to make the best of his new job which lead to him being promoted etc.

We had just lost out on a better property (extra bedroom and bathroom in loft conversion) on the same road as we eventually bought on which sold for 75k under market value (it went to sealed bids - 8 people bid for it). The vendors took a lower bid from a cash buyer (downsizing) as they needed to proceed quickly with the sale or risk losing out on their purchase. They called me to apologise for not taking our bid and explained why!

On previous transactions it looks like our house is worth more than the other one but it’s not. It’s just reflected individual circumstances.

Houses are illiquid unique assets and only worth what someone will pay and what a vendor will accept.

CM

but this is exactly the point many of us are making here:

THIS is the market. the couple expecting a baby and wanting to move regardless. the individual who won the lottery and wants to pay £20k "over" for that quirky fireplace. the FTBer who is simply fed up with yearly rent increases, biting the bullet to buy a house at a "higher" price.

there's no such a thing as "overpaying", because that implies everything is predictably priced, linear. it's literally what people are willing to pay for something.so when people see a house for sale and take the calculator out, they're oblivious to real life. you can't take the percentage increase, apply it to the last transaction and voila, there's your price. it's not!

That used to keep prices at least somewhat sane, but the rise of buy-to-let, parental assistance, and so forth has increased the number of cash buyers and mortgages buyers who large deposits.

Exactly this. 'Overpaying' implies it's over the price that it's 'worth' but the fact that there are people willing and able to pay it shows what indeed it's worth  

I don't really see it the same way. Most people spend money without thinking of the value. Look at the credit card debt people have and how much they've 'really' paid for something. 

 At some point what it's worth is more than one persons decision. That could be interest rates, selling on, etc. 

Lots of things are overpriced even if someone is willing to pay an amount.

lookstraightahead

mi-key said:

Exactly this. 'Overpaying' implies it's over the price that it's 'worth' but the fact that there are people willing and able to pay it shows what indeed it's worth  

Very true. The only way you can say a house is being sold for more than it is 'worth' is if there are two identical properties, exactly the same in every respect, and one is priced higher than the other. As this very rarely happens, it comes down to way a buyer will pay. As very few houses listed never sell, then there is always someone who will pay a price that a seller considers to be what the house is worth.

But if someone is willing to pay an extra £100k for the house next door then by your account it's worth that. So where does it end? 

lookstraightahead

badger09 said:

Apologies for OT post

@lookstraightahead
Family member has recently painted over some garish coloured bathroom tiles. Fairly sure he used tile paint from B&Q, I can check if you’re interested. The finish looks good as a temporary measure until he can afford a complete upgrade.

Yes please that would be great ☺️

mi-key

lookstraightahead said:

mi-key said:

Exactly this. 'Overpaying' implies it's over the price that it's 'worth' but the fact that there are people willing and able to pay it shows what indeed it's worth  

Very true. The only way you can say a house is being sold for more than it is 'worth' is if there are two identical properties, exactly the same in every respect, and one is priced higher than the other. As this very rarely happens, it comes down to way a buyer will pay. As very few houses listed never sell, then there is always someone who will pay a price that a seller considers to be what the house is worth.

But if someone is willing to pay an extra £100k for the house next door then by your account it's worth that. So where does it end? 

If someone did, then it was worth that price TO THEM and that is what matters to a seller and buyer. If you sell your house for a price you are happy with , who cares how many buyers didn't think it was worth that so didn't buy it? 

[Deleted User]

Obviously it depends what you mean by "worth". If you are willing to wait forever for someone to pay £100k over what a mortgage provider values it at, good for you. If you need to move for work then it's very likely not worth £100k over  the market rate in that area.