Aibu to think homeowners are being unreasonable about prices?

[Justawonderer2018]

I live in London so maybe this is very niche but I'm a first time buyer and am shocked at some of the prices people are demanding for their flats.

Im looking at 1 bed flats and it's clear some of them are way over priced and that they're not selling plus the market is falling yet owners are holding out for more.

One flat I saw last year was on for 600k. Way over priced for what it was even though it was a lovely flat. It dropped to 585 earlier this year and is now on for 565. Even still it's probably not worth more than 499k but apparently the seller won't entertain anything less than the current valuation even though he's been waiting over a year to sell. He bought it for a lot less so it's not like he is losing money.

Similarly saw another flat on top of a shop - nice but very small. The owner wants 475k. I would say it's worth about 400k. She bought it almost 20 years ago and it's a rental property for her.

The estate agent told me people are just stubborn but it seems to me to be pure greed. At the same time it's clear that these sellers can and will simply wait till someone comes along who can afford their vastly inflated prices.

Im slightly baffled and irritated

OP - if someone owns a property, they would be pretty stupid not to try to get the best possible price for it.

bluelady would you say the same about rental prices then? That if you can't find affordable rents then the location is out of your price range?

Are you aware that we now have a situation in this country - particularly in London but also spreading to other cities and parts of the country - where workers are homeless because they cannot afford rents in their areas?

Or is it too illogical for you to see the blatant inequality going on here?

Property is worth what someone else is willing to pay, no more. If sellers are willing to hold out, at some point someone with more money than sense (or so fed up with the buying process they just want somewhere, anywhere) will come along and pay. It's frustrating, but it's a case of paying what they demand or walking away.

No way would I pay that sort of money - here detached houses sell for £250k and it's only an hour into London (even at £10k a year it's cheaper than buying in London!)

When we were house hunting we soon discovered a lot of vendors of big family houses would only sell if they achieved their asking price and were not opened for negotiation as they didn’t need to sell urgently.

Eventually after a lot of time wasting we told the EA we would only view houses were the vendors had a pressing need to sell usually as a result of debt, divorce or death. We eventually bought from an elderly couple who wanted to downsize and had put down a deposit on their dream flat and needed to exchange and complete quickly on it

You want something you can't afford, OP. I can't afford the house I would ideally like in the location I'd like to live in. I've had to accept that, maybe you should stop behaving like an entitled brat and accept it too

I had no idea what my house was worth when I got the EA round. It’s in a funny (good) position, much bigger garden/drive than local properties, quiet, corner plot, so tricky to value compared to others. I left it entirely up to the EA to set the price. I don’t think homeowners are the issue, tbh.

Saying that, one EA round here goes low in order to get quick sales whilst another very aggressive national chain is stupidly optimistic in their pricing.

You're talking about two different things here I think. You've started off with the personal choices of individual sellers based on their own situation and preferences. Then you've pointed out, correctly, that property prices in the SE are out of control. But that's a systematic problem that needs to be looked at on a much bigger scale: too many jobs are concentrated in the SE, and there is not enough housing for the people doing those jobs. It's not going to be solved by a few people reading this thread and going "ooh, you're right, I am being a bit grabby."

Prices are high because someone will pay them. If it suddenly became possible to buy a flat in zone 1 for £2.50 then there still wouldn't be enough of those flats to go around and people would still struggle to acquire them via whatever method replaces price as the deciding factor (names out of a hat?).

Seriously I really would not buy now.You have realised how unreasonable prices are.They are coming down and who knows how much further to drop,especially London and the South East.
Most first time buyers have realised this and have stepped back.
Negative equity is not something you ever want to get into.
As you say most of the properties are ex buy to let.As the new tax rules are starting to bite,more and more ex buy to let will off load.
Back away and keep an eye on the market.
You will do yourself no favours buying now and then getting in maybe £50 000 /£100 000 negative equity.Most people think this does not matter,but if you need to change your mortgage then you will get stuck on the higher variable rate because of negative equity.You could even end up being stuck for many years when needing to sell.

*Yes it's clear from a lot of the responses on this thread that vendors are greedy and defensive.

There's simply no point saying I can put it on for whatever price I want and it's not my problem when it's clear that it's too much being demanded. We have a serious housing problem with people on average salaries being unable to afford less than average starter flats. And some of that is very seriously down to greed.*

You really don’t need to begin every post with ‘Yes’.

You still seem to think people owe you, or indeed anyone , a good deal. They don’t. We are all at the mercy of market forces. Think about your job. If you can command £40k per year, would you work for a small company for £25k a year because they need your skills and it’s ‘greedy’ to expect to be paid for them?

YANBU. We viewed a house 18 months ago that was on the market for 320k. It had been on the market for 6 weeks or so, no offers. We offered 310k which was rejected because they wanted more and “ had several more viewings lined up”. 310k was at the top of our budget, so we didn’t make another offer to the EA’s horror. Why it’s just assumed people will keep making higher offers is beyond me!

We went on to buy another house. About 6 months later they dropped the asking price to 305k. It never sold and was eventually taken off the market.

Estate agents valuations have always needed the odd pinch of salt. It's been 5 years since I sold a house, but our 3 bed mid-terrace was valued by 4 agents at between £300 000 and ££325,000 and one agent at £400 000. We didn't go with the highest valuation because it seemed crazily more than the others but I can see how some people would be tempted.

I think the current situation in the South East is more about mindsets catching up with the reality of the market than the vendors being particularly greedy. I'm sure ridiculous valuations aren't helpful though.

Justawonder I totally agree with you. Apparently it’s being an entitled brat to think a home should be within everyone’s reach, and if you’re looking at one bed flats it’s hardly like you’re chasing luxury. But people will defend capitalism to the hilt while it benefits them. They’d be the first to complain if they found market forces working against them

They may be happy to take their time, they may need a set price to make a move worthwhile. We were in similar situation a few years ago. Estate agents valued house at £260k

I knew our house was unique and insisted it was put on at £290k - it sold for that in a week!

If it didn't sell I would have taken it off the market as I needed the extra to fund the move itself - otherwise it would have been a side step for us

People will pay if they want it

Apparently it’s being an entitled brat to think a home should be within everyone’s reach, and if you’re looking at one bed flats it’s hardly like you’re chasing luxury.

It’s not being entitled to want to afford a home. It’s being entitled to think someone else should sell theirs cheaply so you can have it.

on average or better than average or even good salary you should be able to afford property in your area without moving an hour out to commute in with all the negative repercussions that has on the subsequent location.

Yes but it is not the responsibility of people selling to solve this many pronged problem, and on their own they couldn’t anyway - even if they did want to sell their house for less as a public service.

on average or better than average or even good salary you should be able to afford property in your area without moving an hour out to commute in with all the negative repercussions that has on the subsequent location.

DH has well over an hour commute because we just can't afford to live in the city he works in. We can't even afford the very good catchment for schools in this city we can afford.

There are massive structural housing problems not just in London and the South - part of midlands I grew up in has problems.

I spent a fucking decade saving bloody hard to be in a position to buy most of that time it felt like it was always going to be out of reach. I've three kids I want to be able to have options to rent and buy decent house in about a decade’s time.

Doesn't change the fact that sellers may well have price constraints due to finances just as much as buyers and if you need to buy compromises like location may have to be made.

Personally if you think London's overpriced - and I'd agree - wait and see if the prices go the way you want they may well with Britex.

Someone upthread said it was the Brexit effect, I disagree with this & think the market was heading this way regardless as affordability is out of reach, although it’s certainly a factor. Lending has massively tightened up compared to 10 years ago so people can only stretch themselves so far now, I don’t see how it can be normal for a bog standard terrace in zone 3 to only be affordable to those earning 200k with a chunky deposit.

I think London & the SE is in for a long period of stagnation & we will see a lot more growth in other cities. 4 of my neighbours have relocated to Bristol, Manchester, Edinburgh. They had healthy budgets (800k plus) but just were not happy with what that budget afforded them here. Even with the salary drop (which isn’t that much depending upon sector) their money has gone so much further. Plus interest rates have to rise at some point so who knows what will happen.

It depends on the owner's circumstances. We tried to sell our flat 3 years ago. Agent valued it as 90k, we had bought it for 87k seven years previous. I wanted it to be put on for 100k as I knew the area and the prices. Turned out that agent undervalued it to get a quick sale. We decided to move and to rent out our flat. The flat is now worth 160k. We see the flat as our pension. I don't think we're being unreasonable but I guess it depends in your position.

I’m in my 30s & a Londoner so I have been lucky with house price gains etc but I think the current housing market is a huge issue. We have a big productivity problem & younger generations in their 20s have to pay huge uni fees, high rent plus somehow save for a deposit & a pension. Oh and also spend their disposable income to keep the shops & services in business. I also think the younger generations want more of a work life balance & if course a lot now have the opportunity to work remotely which means they are not so tied to a location. My younger brother works for a London company but has just spent 6 months in Barcelona working remotely.

Tricky one, this, isn’t it?
One problem is that low interest rates have meant that investors have latched onto property as being a good way of making a very good return on their investment.
Until other investment opportunities catch up, private landlords are more able to buy properties than a struggling first time purchaser, AND are able to control rent prices. So you could argue that it’s all the fault of those “greedy investors”, too!
Something has to give. Whether it’s interest rate rises (which will adversely affect those home owners, who bought within the last few years and for which their one property is their sole dwelling, but will benefit investors), or whether it’s a large government funded building programme that results in low-rent properties becoming available (and with rent caps) driving down the cost of rentals (and affecting the private landlords’ income adversely), but in the end, someone will lose out.
I bought last century, so if the price of my property falls, it won’t affect me much, but for those who have recently bought at a price at least five times what I paid for my modest semi, well a downturn will hurt them - badly, and that’s not good news either, as struggling to pay a vast mortgage in negative equity is no fun, and results in misery for many.
FWIW, I am a firm believer that having any place to call your own should only ever cost a maximum of one-third of family take-home pay, but whether we can ever hope to return to those days is unclear.
So OP, I don’t think it is the home owners that are being greedy, but rather those who buy to let at prices that cost more than their mortgage repayments do for their property, thus driving up the cost for everyone else. At the same time, I can see why they do it - there is no better investment option at the moment!

We moved to east sussex last year. Very motivated move, sold our house same day to motivated buyers with a complete chain.
The local ea here warned us that many houses on the market locally never sold. The owners could never find what they wanted:which was typically something pretty, a bit smaller for half the price!

The selling-off of social housing is also a factor. Not just under right to buy, I'm sure some Local Authorities in London offer financial incentives to those with secure tenancies to give them up. Not enough form them to then buy in London.

That if you can't find affordable rents then the location is out of your price range?
Well yes of course you would say that! I don’t understand your logic really, everyone can only rent or buy where they can afford to do so.
I live in zone 6 London but I’d like to live in zone 2 where I work but there is no way on earth I can afford that so I live where I can afford.
I work with people who’ve moved right out of London to Milton Keynes and Cambridge and commute in because they can’t afford to live locally. It’s literally what all but the most rich do, I don’t really understand why you think people don’t.
Fwiw I think housing market is ridiculous and it is too hard for first time buyers but houses are worth what people can pay. If someone is buying flats at these price then that’s what they are worth. If they are not selling the the market will adjust overtime.

Fwiw OP I think we need a massive programme of house building both for social housing and affordable housing for private sale. I do agree there is a problem but really you’re blaming the wrong people.

I know what you mean OP. We bought our house at the tail end of the recession. Our sellers were holding out for boom prices. They were well off people on high incomes and the house was an inheritance. They dropped the asking price quite a few times but still wanted too much in our opinion.

We made an offer which was refused. It was a good offer and a fair one, based on what needed to be done to bring the house up. No one else bought it. We were persistent and over about a 6 month period we went back to the EA three times to say that we were still interested and ready to buy.

It took them that length of time to realise that the landscape had changed and accept that actually we were making a really fair offer. They finally sold the house to us for ten thousand more than our original offer which we agreed to. Sometimes people need time to realise that this is as much as they will get.