House prices..

My house was valued and advertised by Remax at £200,000 in September.

It has now been re-valued by Remax again at £195,000.

Please explain again how that isn't a drop in estimated value - as if I sold it now - I would potentially have £5000 less than if I had sold 3 months ago - and that is what my mortgage advisor is using for his figures?
 
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divosuk said:
My house was valued and advertised by Remax at £200,000 in September.

It has now been re-valued by Remax again at £195,000.

Please explain again how that isn't a drop in estimated value - as that is what my mortgage advisor is using for his figures?
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Because prices are, ultimately, defined by selling price, not valuation. Prices have been steadily rising, but if they stop rising, it takes market and valuation a couple of months to realise.
 
And as I said, the final selling prices around here have dropped by approx £6000 compared to their final sale price in Aug/Sept.

"House prices in Northern Ireland are down by 11.4% compared with the second quarter of the year, it was revealed today.
Despite the latest findings from the Nationwide's House Price Survey, the province is still enjoying the highest house price growth in the UK at 42.6% for the critical third quarter of the year (July-September). House prices here have tumbled down from a whopping 54% in the second quarter of this year to the current level, making the province the region with the greatest slowdown."

Quote from the Telegraph.

To me - that means house prices are falling.
 
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divosuk said:
And as I said, the final selling prices around here have dropped by approx £6000 compared to their final sale price in Aug/Sept.

"House prices in Northern Ireland are down by 11.4% compared with the second quarter of the year, it was revealed today."
Quote from the Telegraph.

To me - that means house prices are falling.
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They aren't falling.

Valuations (i.e. what your house is actually worth) is still increasing.

The amount someone is willing to pay OVER the valuation is possibly decreasing / rate of increase is reducing.
 
Haircut said:
You house isn't worth what it's valued at - it's worth what someone is willing and able to pay for it.
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Incorrect. For mortgage purposes your house has a VALUE, which is what a surveyor sets as the value of your house. If someone pays over this, then they have paid more than the value of your house.
 
jamief said:
Incorrect. For mortgage purposes your house has a VALUE, which is what a surveyor sets as the value of your house. If someone pays over this, then they have paid more than the value of your house.
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Yes, but that's only so they don't give you a mortgage for more than they could sell the house for if they need to repossess.
The value the surveyor gives is determined by what other people have been paying for similar houses in the area, if people stop paying as much the market value goes down but it can take a little bit of time for valuations to react.

The value of an asset on the open market is determined by what people pay for it.
 
Haircut said:
Yes, but that's only so they don't give you a mortgage for more than they could sell the house for if they need to repossess.
The value the surveyor gives is determined by what other people have been paying for similar houses in the area, if people stop paying as much the market value goes down but it can take a little bit of time for valuations to react.

The value of an asset on the open market is determined by what people pay for it.
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The value that a surveyor gives your house is the fair market value, normalising/reducing things like current fluctuations in the market (such as the surge we've had over the past few years) to an extent.

I've seen several cases where houses in a new street have sold for say £150k+, yet the surveyor values at £120k. Surveyors have a duty not to over inflate prices, as this would lead to the market going upwards even faster than it already did. You can be assured that the value of your house IS what the surveyor valued it at - if you want to pay above the value, feel free. That is the thing that most people don't get - the market isn't currently dropping, the value of your house is the same - the amount you sell it for might be closer to its true value however. When 90% of houses in the country have been selling for more than they are worth, and this begins to slow down, people panic, assume that the value of their house has gone down, when in fact it hasn't. They just overpaid in the first place.

Just as an edit to that - when we were buying our house we had close contact with surveyor as my fiancée works as a solicitor - surveyor basically said that although a few other houses in the street had sold for £140k, he couldn't value ours (or theirs, when he valued them) above £120k as it would have a detrimental effect on the market - i.e. people could then afford to bid £160k for these houses, rather than £140k (based on the mortgage companies LTV%).
 
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JodieG said:
That's odd as the ones I've seen recently sell have been for a good amount. I watch what the house buy and sell prices are online to keep up with the market. If we sold this place we'd make over 30k already and we bought 3 years ago.
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Thats what happened to us, 4 years after we brought it it had gained 35k! Had to sell unfortunately, now renting for a fortune in essex:(
 
jamief said:
That is the thing that most people don't get - the market isn't currently dropping, the value of your house is the same - the amount you sell it for might be closer to its true value however.
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What a complete and utter contradiction.

If previously people were prepared to pay way over the 'valuation' then my house was worth more to me, than it is if everyone is only prepared to pay less (closer to its 'valuation').

I get less money from the sale, than I would have done? And so the market is dropping!!

If my house was valued at £1million pounds, but I could only sell it for a fiver, I wouldn't try and convince myself that the market wasn't in decline, because of a completely irrelevant 'valuation' quotation.
 
House prices will not drop significantly IMHO, there are always 2 prices for a house, the price you advertise it for and the price you actually end up selling it at :)

The amount of houses selling is going to slow down, because the banks are now not lending silly mutiples to people that should have never had credit in the first place, therefore reducing the amount of people able to buy. This in turn will mean a little price compression as people will have to drop their expectations and give a few grand off to sell their houses.

The main thing that will cause house prices to fall is if we see large scale job losses. Those people will have to live somewhere though so the "buy to let" market will then be up and coming!

HEADRAT
 
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Valuation is an art rather than a precise figure, lot of educated guess work and predication involved.
 
div0 said:
What a complete and utter contradiction.

If previously people were prepared to pay way over the 'valuation' then my house was worth more to me, than it is if everyone is only prepared to pay less (closer to its 'valuation').

I get less money from the sale, than I would have done? And so the market is dropping!!

If my house was valued at £1million pounds, but I could only sell it for a fiver, I wouldn't try and convince myself that the market wasn't in decline, because of a completely irrelevant 'valuation' quotation.
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Yet another person who doesn't get it.

Your £1 million pound home may have a mortgage valuation of £1,000,000.
It might sell for £1,100,000.

The value is still £1,000,000

Then, the market slows down, and you might sell it for £1,050,000. You haven't lost any money, however if you weren't aware of what had happened you might presume that you had lost money. The value of your house is still £1,000,000 as far as the legal valuation is concerned, but because the market has slowed, potential buyers don't want to pay 10% more than the valuation for it.
 
divosuk said:
To me - that means house prices are falling.
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A house price fall can also include a rise in the final figure if the rate of increase was below inflation. In realistic terms it has devalued in relation to inflation.

Yours has gone down though, the local stats show it so no doubts there :D
 
Also it always make me laugh when they say we have "low interest rates" even back when they were much cheaper than they are now, we've never had to pay so much for housing therefore the amount we have on credit ergo we pay a butt load more interest!

HEADRAT
 
jamief said:
Yet another person who doesn't get it.

Your £1 million pound home may have a mortgage valuation of £1,000,000.
It might sell for £1,100,000.

The value is still £1,000,000

Then, the market slows down, and you might sell it for £1,050,000. You haven't lost any money, however if you weren't aware of what had happened you might presume that you had lost money. The value of your house is still £1,000,000 as far as the legal valuation is concerned, but because the market has slowed, potential buyers don't want to pay 10% more than the valuation for it.
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What if it doesn't sell for two years?
If you then eventually accept an offer of £800K is the value still £1 million?
 
In regards to JamieF

My house was valued by two seperate surveyors at a cost of £125k

I had several offers ranging from £90k to £110k which I finally accepted.

Please tell me how that means the value of my house has not gone down?
 
I think his argument is that the value of your house is being artificially inflated, and as such your house is actually worth more along the lines of £110k.
 
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