Housing Market, wrong time to buy?

Soldato
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I've just seen a house that I'm interested in but the price is high even for pre-lockdown (I know how much it originally sold for a year or so ago).

Would I be wrong in assuming that house prices are going to fall or at least the be unsettled for some time?

A friend of mine has his house up for sale since pre-lockdown and the estate agents have warned him that the price will drop as a result of the situation, but that was a few weeks ago and obviously nothing has happened since.

The house is listed as offers in excess of £230K, would you be cheeky and put in a lower offer for a cash sale?
 
Soldato
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It wouldn’t be cheeky at all. If you think the house is over priced then put in an offer for what you think it’s worth. The seller can only say no. And you may be doing them a favour by buying it.
 
Soldato
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It wouldn’t be cheeky at all. If you think the house is over priced then put in an offer for what you think it’s worth. The seller can only say no. And you may be doing them a favour by buying it.
Nothing wrong with offering what you think it's worth.

Thanks, I know what it went for a year or so ago and would normally put in an offer based on that.

What I'm thinking about is putting in a lower offer to cover myself if prices do drop a lot and I want to sell again in a year or so. I guess you're right though an offer is an offer and if they say no then fair enough, I'm not willing at this stage to pay asking as it's too much of a risk in uncertain times.
 
Associate
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Thanks, I know what it went for a year or so ago and would normally put in an offer based on that

I would assume that most sellers know that this information is easy to find an freely available and would expect offers based on this fact. From what you are saying I am guessing the sale price is quite a lot lower than what it is on the market for. Has their been any improvements to the house since it last sold?
 
Soldato
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I would assume that most sellers know that this information is easy to find an freely available and would expect offers based on this fact. From what you are saying I am guessing the sale price is quite a lot lower than what it is on the market for. Has their been any improvements to the house since it last sold?

It was a new house at the time which I missed out on as I was away with work. At the time I could have got it for £215K inc a flooring (carpet) allowance etc. So there would have been no improvements unless they went for really expensive flooring/carpet.

I've emailed the estate agent, I'll see what they say.
 
Soldato
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Many lenders have pulled the plug on low LTV loans for the interim at least until the interest rate improves.
 
Soldato
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3-5% drop is the general consensus but with recovery in 2021
I find that difficult to believe unless government injects loads of money, which they probably are but at the moment stocks are still down a lot. This usually leads into the housing market
Realistically this event that should knock property prices 10-20%. While the stock market is currently recovering, it's still down 22% and if it takes another hit down below the low point it's likely going to bring house prices down with it. Property is not a fast moving market so will take time for the real drop to be known.
As a cash buyer I'd want to put in offers 20% lower than peak prices if it were me and not in any rush to buy. Otherwise I'd wait it out a bit. Should stocks get hit again, lets say ending up 40% down, it's difficult to image property only dropping 3-5%.
 
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Soldato
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Many lenders have pulled the plug on low LTV loans for the interim at least until the interest rate improves.

This isn’t due to interest rates, it’s due to the potential drop in values not being known. If a property loses 15% of value just after it’s been mortgaged at 90% ltv then the bank will lose money if it’s repossessed. They’re just protecting themselves. Once properties start selling again and the market values are known these products will come back even if the interest rates are still low.

Really we can only speculate on the value drops, there isn’t any data yet as all the transactions are on old. There’s some information out there on commercial yields but for the residential side we need to wait for things to get going again.
 
Caporegime
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It was a new house at the time which I missed out on as I was away with work. At the time I could have got it for £215K inc a flooring (carpet) allowance etc. So there would have been no improvements unless they went for really expensive flooring/carpet.

I've emailed the estate agent, I'll see what they say.

In my area all new builds are horrifically overpriced and I mean by like 20% sometimes even 30%.

I'd want to know why they are selling so quick after buying. If he's just lost his job then he is desperate to sell, etc.

He could have just bought a pub which will now be going bust as nobody is going to the pub until there is a vaccine.

There are so many factors - nobody will be buying currently so I'd low ball him all day and I'd be prepared to let it go. The market for sure is going to suffer for the next 2-3 years. I don't believe this recovery next year crap. There will be no recovery until there is a vaccine.
 
Soldato
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Is there a reason you're only looking to purchase and sell within a year?

The issue with short term ownership excluding the legal fees you'll have to pay twice, is that you'll be exposed to any movement in the market.

Frankly if you're honestly only looking to buy and flip in a year then I wouldn't bother as it's far too risky.
 
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