Buying a central London property - help!

cattie

<<<The agents said offer £270k - but we are going to offer £260k and stick to it. We think it's a reasonable price for a flat price in London at the moment. >>>


For the sought after postcodes you mentioned, the asking price of the flat sounds incredibly reasonable to me.

lush_walrus

meanmachine wrote:

Thanks for that Lush.

But I know the games that EAs play. And I'm sure many properties are valued at 280K, rather than £260K, in the attempt to break through the stamp duty threshold. Why wouldn't they try this trick?

Doesn't mean I'm going to fall for it.

It's extraordinary, just like with the top rate of tax, that so many properties now fall into this 3% stamp duty rate. Another example of new labour's "fiscal drag". Disgraceful.

I'm not trying to defend every estate agents valuations, but I'm not sure what you think Estate Agents gain by breaking through the stamp duty threshold? Estate Agents do not gain from the tax, the money goes as per all taxes to central government for distribution amongst us all.

To be honest Estate Agents are more likely to undervalue property close to the threshold, to stop people hesitating at purchasing the property. After all Estate Agents only get fees through selling, not through gathering more tax for the government. And despite what people seem to think, it is not worth estate agents pushing prices up to gain more fees, the quicker propertys sell the quicker they get their money.

I completely agree with you on the level of the 3% stamp duty and I think even more of a problem is that such as inheritance tax, 3% stamp duty is charged on the whole amount, a preferable situation for everybody would be to charge it as income tax at the amount over the threshold.

But, thats an argument for the government, and another justification to not keep Blair et all in power for any more terms after this one!!!

Debt_Free_Chick

meanmachine wrote:

Especially when I can check up on nethouseprices and see that these same greedy vendors paid "just" £150K for it in 2002.

Is that relevant? I paid £1000 for a PC in 2002, but can buy the same spec now for £500.

Surely, previous prices are no reflection of today's "value". In any event, just because one person won't pay the asking price, doesn't mean another one won't.

It's an odd market, with no real "valuation" of true worth. Any property is only worth (to you) what you are prepared to pay for it.

meanmachine_2

cattie wrote:

<<<The agents said offer £270k - but we are going to offer £260k and stick to it. We think it's a reasonable price for a flat price in London at the moment. >>>


For the sought after postcodes you mentioned, the asking price of the flat sounds incredibly reasonable to me.

Not really. A quick glance on findaproperty tells me the ave price for a one bedroom flat in this postcode is £260K, and these stats are always inflated anyway. Example:

http://www.findaproperty.com/agent.aspx?agentid=2841&opt=prop&pid=060713&photo=2#photo

meanmachine_2

Debt_Free_Chick wrote:

Is that relevant? I paid £1000 for a PC in 2002, but can buy the same spec now for £500.

Of course it's relevant. Property prices are traditionally linked to wages. They've only become separated in recent times due to speculation. Now that that's died out, you have to reconnect wages to prices. But anyway let's not go into that.

lush_walrus

Prices were never actually linked to wages, but by what people had access to borrow. In recent years, mortgage companies have been more relaxed about their lending criteria, making it possible for anyone to borrow pretty much anything.

That is what is dictating prices, as that is what sets the level of what people can afford. The prices will continue to rise until either the banks start to tighten up or the interest rates rise far enough that people can't afford the repayments.

Out of interest Meanmachine presuming that you are a home owner would you a. Take a 30,000 drop in price and b. refer to general statistics such as 'findaproperty' in valuing your own home when you want to sell? If you would then if the agent valued your property properly and came to a different conclusion to a statistics website what price would you want to acheive:? The lower statistic or the higher true value?

The problem with just assessing statistics is that they do not allow for a million variables which a human valuing a house would.

Its also quite a common problem in buying and selling houses, that where a vendor may not want to accept a big drop in the price of their house, when it comes to buying they still expect the house they are buying to be reduced so that they can afford to buy it. Very strange!

John_M_Business

Historical prices have little bearing on today's prices. Even though a 'greedy' vendor may seem to be raking it in, in most cases the flat has just gone with the market - everything else they're looking to move to is worth more too. Vendors of flats/houses are NOT greedy, they are just trying to get the best price for their property. You could equally argue that buyers are greedy for offering well below asking price.

In the end, a property is sold for what it's worth...

For example, my maisonette is now on the market - it has four bedrooms and is in fantastic condition (complete overhaul and conversion last year) - and yet it is on at the SAME price as a two bedroom maisonette nearby... why? Well, my flat is about 1,250 sq ft (but has a garden), and the other flat is 1,600 sq ft... but you could not have worked that out unless you'd seen them or I'd told you.

The other maisonette has just gone under offer at about 95% of the asking price, and, guess what? We're sitting on an offer of almost exactly the same. This is not a surprise to us, we thought that the full asking price we were looking for was a bit strong, but at the same time, not that strong... we may well accept the offer. But if someone came in at less than 90% of the asking we'd kindly tell them to get lost and look for something within their budget.

It's too easy to jump to conclusions - not every flat / house is overpriced, not every vendor is greedy, not every market is dropping... please don't judge before you know the facts. As always, the most informed buyer is the one who has shopped around before purchasing, knows the area, knows the streets, knows the 'going rates' and then makes an offer that is fair and reasonable.

meanmachine_2

The problem you might encounter - and this isn't guaranteed of course - is that you get an offer apparently "confirming" the price of your property, yet you are unable to complete because there is no FTBer around to kick off a chain.

And there are no, or few chains, because the ladder has long since become detached from its moorings and drifted off into cloud cuckoo land.

However, John do keep us informed of your transaction. Again, as always, more than happy to be proved wrong.

And Lush, banks only slashed their lending criteria because the USA was pumping out cheap money @ 1%. That's no longer the case.

John_M_Business

meanmachine wrote:

The problem you might encounter - and this isn't guaranteed of course - is that you get an offer apparently "confirming" the price of your property, yet you are unable to complete because there is no FTBer around to kick off a chain.

And there are no, or few chains, because the ladder has long since become detached from its moorings and drifted off into cloud cuckoo land.

However, John do keep us informed of your transaction. Again, as always, more than happy to be proved wrong.

You couldn't be more wrong - but why not keeping guessing and guessing and guessing...

The offer on the table is from an American who works in the city, been in the country two weeks, cash on the table (relocation package).

A couple seeing it today: he's a VP of a major bank. Renting at the moment, money ready to purchase.

A couple who've had two viewings: renting nearby, looking to buy, have the cash. No chain.

You see, the massive advantage of all of those people that ARE renting in London at the moment is that there are a lot of chain free people swinging around.

We're going to go 'chain free'. Moving out of London, rent for a year - puts us in a strong position! We're not 'officially' FTBs, but we'll be just like them - no chain; only better - high cash/low mortgage offer.

meanmachine_2

Good for you John.

Now maybe you'll stop being so aggressive. :rolleyes: