Reducing house offer after months of waiting for completion

fackers_2

RelievedSheff said:

TerryDuckworth said:

LLM000 said:

Thank you for all of your comments and advice. It has been really good to hear different thoughts. I would like to add that I have been looking on Zoopla today and can see a lot of houses in the area I am buying have been reduced a lot over the past month. A lot of houses that were put on the market at the beginning of June and are being reduced by £25k and some even £50k after just a few weeks on the market.. seemingly lovely houses from the pictures with no obvious work needing done.

This has made me really question the price of the property I am wanting to buy now as clearly, in my area the prices are coming down.. I have not known so many properties to reduce so vastly in such a short space of time.

I am also experiencing this with Rightmove sending me alerts by email with properties being reduced. This may well be the new trend for the next year or two.

It certainly doesn't seem to be the trend everywhere.

A work colleague is as we speak trying to secure his first house. Property went on the market last week with an asking price of £130k. His current offer is just shy of £140k and by no means guaranteed to be accepted.

There are 3 lots of interested FTB parties offering on it. The vendor is keen to tie up the deal today so it hopefully won't be too drawn out for him.

Property prices vary so much from street to street, area to area and county to county that there really is never a countrywide trend in either direction. Even now with the media widely claiming a housing market decline (with the minor 1% changes) there are still some areas which are experiencing positive house price growth.

Totally agree. It’s crazy, go on some forums and twitter and it’s like people are expecting things to be a one day event likening to a Black Friday fire sale on houses. 

In reality, most won’t know we’ve touched the bottom until it’s too late to buy. There will always be sort after type houses and areas. Average overall will likely be -20% IMO. But some places may only see a 5%. 

Quality houses and rightly priced houses will always sell well with competing offers. Those who are having to reduce are being caught out by thinking they can still get the same price that John at #4 down the road got in 2022. Those houses will be the ones with the biggest reductions. - chasing the market. 

fackers_2

MobileSaver said:

simon_or said:

MobileSaver said:

LLM000 said:

A lot of houses that were put on the market at the beginning of June and are being reduced by £25k and some even £50k after just a few weeks on the market.. seemingly lovely houses from the pictures with no obvious work needing done.

The obvious thing to do is to pull out of your current purchase and buy one of the £50,000 cheaper houses instead... is that what you're going to do?

If the OP is planning to pull out anyway, then it would make sense to check if the vendor is willing to renegotiate before doing that. Who knows, the vendor might prefer that as well over losing their buyer. Don't ask, don't get.

If the OP is planning on pulling out anyway then I agree, there's nothing to lose.

However the chances of the seller agreeing to knock £50,000 off the price agreed just two months ago is slim in the extreme... I'm not sure even the HPC zealots would bet on the chances of that being successful.

Only if it’s justifiable. Needs a new roof / wall underpinning etc. better off making excuses, pull out and potentially try get it again in a few months while it’s still priced at the original asking price. - highly likely they’ll never want to hear from you again. 

tooldle

simon_or said:

tooldle said:

I’m intrigued to know where you are for such large reductions.
Where I am two things seem to be happening. Some houses stagnating on the market for many months have decreased their asking prices slightly. New to market properties are appearing at much higher and escalating prices. 

I guess it's the percentage that matters rather than the absolute number. 25k on a 500k property is only 5% so not a huge reduction. OTOH on a sub 200k property that would be a very sizeable reduction.

Plus as someone mentioned above, every area and sub-area has its own property market so there's likely to be quite a bit of variance across the country. In my local area in the NW, starter properties at the lower end are flying off the shelf while the larger pricey properties are sticking on and either being pulled or noticeably reduced, with the pace increasing in recent weeks.

Hence my curiosity. OP is a first time buyer but we don’t know where or at what price point.

simon_or

fackers_2 said:

RelievedSheff said:

TerryDuckworth said:

LLM000 said:

Thank you for all of your comments and advice. It has been really good to hear different thoughts. I would like to add that I have been looking on Zoopla today and can see a lot of houses in the area I am buying have been reduced a lot over the past month. A lot of houses that were put on the market at the beginning of June and are being reduced by £25k and some even £50k after just a few weeks on the market.. seemingly lovely houses from the pictures with no obvious work needing done.

This has made me really question the price of the property I am wanting to buy now as clearly, in my area the prices are coming down.. I have not known so many properties to reduce so vastly in such a short space of time.

I am also experiencing this with Rightmove sending me alerts by email with properties being reduced. This may well be the new trend for the next year or two.

It certainly doesn't seem to be the trend everywhere.

A work colleague is as we speak trying to secure his first house. Property went on the market last week with an asking price of £130k. His current offer is just shy of £140k and by no means guaranteed to be accepted.

There are 3 lots of interested FTB parties offering on it. The vendor is keen to tie up the deal today so it hopefully won't be too drawn out for him.

Property prices vary so much from street to street, area to area and county to county that there really is never a countrywide trend in either direction. Even now with the media widely claiming a housing market decline (with the minor 1% changes) there are still some areas which are experiencing positive house price growth.

Totally agree. It’s crazy, go on some forums and twitter and it’s like people are expecting things to be a one day event likening to a Black Friday fire sale on houses. 

In reality, most won’t know we’ve touched the bottom until it’s too late to buy. There will always be sort after type houses and areas. Average overall will likely be -20% IMO. But some places may only see a 5%. 

Quality houses and rightly priced houses will always sell well with competing offers. Those who are having to reduce are being caught out by thinking they can still get the same price that John at #4 down the road got in 2022. Those houses will be the ones with the biggest reductions. - chasing the market. 

Do you really think it'll be that high -20% overall?

With inflation raging the way it is, in real terms I think we will see at least a 20% fall from peak but I doubt it'll go that far down in nominal terms.

Sarah1Mitty2

MobileSaver said:

simon_or said:

MobileSaver said:

LLM000 said:

A lot of houses that were put on the market at the beginning of June and are being reduced by £25k and some even £50k after just a few weeks on the market.. seemingly lovely houses from the pictures with no obvious work needing done.

The obvious thing to do is to pull out of your current purchase and buy one of the £50,000 cheaper houses instead... is that what you're going to do?

If the OP is planning to pull out anyway, then it would make sense to check if the vendor is willing to renegotiate before doing that. Who knows, the vendor might prefer that as well over losing their buyer. Don't ask, don't get.

If the OP is planning on pulling out anyway then I agree, there's nothing to lose.

However the chances of the seller agreeing to knock £50,000 off the price agreed just two months ago is slim in the extreme... I'm not sure even the HPC zealots would bet on the chances of that being successful.

PropertyLog is full of 50,75 and 100k price drops.

thearchitect

I note in passing that any discussion regarding the impact of high interest rates on total repayments also has to be considered against the backdrop of inflation related pay rises and hence the effective devaluation of the base debt over time.

Bigphil1474

You'd be unlucky if you paid 6% interest for the next 35 years. Our mortgage varied from about 8% down to 1.8% over the 22 years we paid it.

Sarah1Mitty2

thearchitect said:

I note in passing that any discussion regarding the impact of high interest rates on total repayments also has to be considered against the backdrop of inflation related pay rises and hence the effective devaluation of the base debt over time.

True, but the government are resisting inflation linked pay rises while telegraphing loud and clear that interest rates need to rise?

Sarah1Mitty2

gazfocus said:

LLM000 said:

Thank you for all of your comments and advice. It has been really good to hear different thoughts. I would like to add that I have been looking on Zoopla today and can see a lot of houses in the area I am buying have been reduced a lot over the past month. A lot of houses that were put on the market at the beginning of June and are being reduced by £25k and some even £50k after just a few weeks on the market.. seemingly lovely houses from the pictures with no obvious work needing done.

This has made me really question the price of the property I am wanting to buy now as clearly, in my area the prices are coming down.. I have not known so many properties to reduce so vastly in such a short space of time.

I suppose the question is, how do the properties that are coming down in price stack up to the property you are wanting to buy? Are they in the same price bracket (so are making your purchase look expensive) or are they in a different bracket where (if cheaper) buyers are finding it tighter, or, if more expensive, sellers were just over ambitious to begin with?

Only you can decide what you want to do, but do make sure that lowering your offer won't mean you need to get a new mortgage offer at a higher rate.

For us, I have already decided that if our sale falls through (which is looking more likely every day), I am going to relist my house at a higher price - mainly because I priced it low to begin with to get it sold quickly...that ship has long sailed now so if it doesn't sell straight away, then so be it.

That doesn`t really make sense in this economic climate, to sell it you would need to list at lower than the original price?

GDB2222

Bigphil1474 said:

You'd be unlucky if you paid 6% interest for the next 35 years. Our mortgage varied from about 8% down to 1.8% over the 22 years we paid it.

https://www.bankofengland.co.uk/statistics/yield-curves

Yield curves indicate bank rates around 4-5% for maybe 20 years. Borrowers would normally pay say 1% more. So, not all that far off 6% for the next 35 years is quite possible. 

The implied inflation rate is around 4% for the foreseeable future.