Fantasists?

Slinky

BobT36 said:

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). 

Surprisingly yesterday there was a couple with a toddler looking at the one up for sale. We were tidying up out the front as they left and I had a chat with them and showed them what we'd done with ours as they were looking at the changes we'd made to the front. They mentioned London and Cambridge as their previous homes so perhaps they have done well with price rises elsewhere, although said they thought the £595 was pushing it with the condition and the agent had said they'd had similar feedback from other viewers.

I suspect an inheritance and London equity have been involved with the last two purchases.

Slinky

Going back to the OP's original point, just seen this one on Escape to the Country which sold for £527.5K in 2021 and is now up for £625K now. Done nothing to it. It appears the people on the show were the buyers.

https://www.rightmove.co.uk/properties/131415431#/?channel=RES_BUY

lookstraightahead

mi-key said:

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? 

So what's the point of valuing anything? It matters when you sell on.

How about an insurance claim on a necklace? 

mi-key

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? 

So what's the point of valuing anything? It matters when you sell on.

How about an insurance claim on a necklace? 

Not really relevant as normally with a necklace you can go and buy another one exactly the same, or if it's a bespoke piece you can get one made to replace it, so it is easy to give it a definite value.

jimbog

[Deleted User] said:

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.

The rise of buy-to-let, parental assistance, and so forth has increased the number of cash buyers and mortgages buyers who have large deposits. Consequently what the mortgage provider values it at is less relevant

mark_cycling00

Slinky said:

Going back to the OP's original point, just seen this one on Escape to the Country which sold for £527.5K in 2021 and is now up for £625K now. Done nothing to it. It appears the people on the show were the buyers.

https://www.rightmove.co.uk/properties/131415431#/?channel=RES_BUY

Escape to the country (generally) get given nice homes that estate agents simply can't get anyone else to buy. 

We spent a few years off and on viewing homes in the Cotswolds and so many of the properties that simply wouldn't sell ended up on the programme.

It's a great show, just the nature of TV 

lookstraightahead

mi-key said:

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? 

So what's the point of valuing anything? It matters when you sell on.

How about an insurance claim on a necklace? 

Not really relevant as normally with a necklace you can go and buy another one exactly the same, or if it's a bespoke piece you can get one made to replace it, so it is easy to give it a definite value.

What's a definitive value? What's it based on? I just don't get how you can say a house is valued at what it's worth to the buyer, but not a necklace, as that has a definite value based on someone else's valuation. Surely that's what a mortgage lender does? 

Linton

lookstraightahead said:

mi-key said:

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? 

So what's the point of valuing anything? It matters when you sell on.

How about an insurance claim on a necklace? 

Not really relevant as normally with a necklace you can go and buy another one exactly the same, or if it's a bespoke piece you can get one made to replace it, so it is easy to give it a definite value.

What's a definitive value? What's it based on? I just don't get how you can say a house is valued at what it's worth to the buyer, but not a necklace, as that has a definite value based on someone else's valuation. Surely that's what a mortgage lender does? 

A lender’s only criterion is whether they are likely to get their money back should the borrower default. There may well be factors that are important to a particular buyer but not to a lender or vice versa.

aoleks

Linton said:

lookstraightahead said:

mi-key said:

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? 

So what's the point of valuing anything? It matters when you sell on.

How about an insurance claim on a necklace? 

Not really relevant as normally with a necklace you can go and buy another one exactly the same, or if it's a bespoke piece you can get one made to replace it, so it is easy to give it a definite value.

What's a definitive value? What's it based on? I just don't get how you can say a house is valued at what it's worth to the buyer, but not a necklace, as that has a definite value based on someone else's valuation. Surely that's what a mortgage lender does? 

A lender’s only criterion is whether they are likely to get their money back should the borrower default. There may well be factors that are important to a particular buyer but not to a lender or vice versa.

yes, and that value is based on previous transactions. those transactions, even if excessive in your eyes, ARE in fact the market, the information we decide the value based on. if a house sells for more than any other house on the street, it was worth that price to someone, even if you disagree. next time, that transaction will be part of the decision-making process when establishing the value of a property.

why is this concept so difficult to accept?

edgex

MobileSaver said:

lookstraightahead said:

mi-key said:

[Deleted User] said:

Property is only worth what someone is willing to pay. Sellers can be as optimistic as they like, but if nobody is willing to pay that much it won't help.

And the flipside is property is worth what someone is willing to sell for. Buyers can be as optimisitic as they like, but if nobody is willing to lower their price enough for them to buy, then it won't help them either

This is true, except like owning a shop a buyer can go to the next one if it's too expensive. It depends really where your mindset is as a buyer. You've nothing to lose really if you keep a level head.

All well and good in theory but back in the real world that's not how it actually works; the problem is that there aren't enough suitable houses in the locations that people want them.

Even on this forum (which is a small fragment of the entire UK house-buying public) we get posts practically every day from people who are struggling to find their next home.

Here's an example from yesterday from a poster who has looked at 34 houses and none are suitable. In the same thread another poster has looked at 43 flats and still not found their next home...

When houses are already in short supply if you then add in your own special criteria of, for example, refusing to pay more than 10% under asking then you do have something to lose because the likelihood is that you won't be moving into a new home any time soon.

Quote from that poster; "We want to downsize...Not one of them comes close to the house we currently have. Nowhere near!" Of course they won't! They're going to be smaller, so are less likely to have downstairs bathrooms, en-suites, big garden etc! That doesn't mean that the houses for sale in their area don't have daft asking prices though. As the OP in that thread has pointed out; "For example, we quite liked one, but it is priced at 25% more psf than ours, is in a worse position, has nowhere to park the car, has a smallish garden which is heavily shaded by the neighbours' trees and is noisy, a lot of the floor area is on the 3rd floor, which is not where we need it, it's listed … The list of cons goes on. " Now we can't see the properties to compare, but a 25% difference in price/size is considerable.