Properties relisted at pre-COVID prices - are sellers in cuckoo land?

[househunter2020]

Started property search in February (London) and saw various properties quickly sold, obviously riding on post election bounce. We did not put in offer for any. Now we are seeing from this week properties that were sold get relisted at previous asking price (Jan/ Feb time). Are sellers in cuckoo land?

Just spoke to one agent about one relisting and asked if seller is reducing the price and was told oh that one was priced very well already and sold straight away last time it was listed, only now the buyer pulled out due to work problems... Of course it was February or a century ago...

I would expect about 5% reduction from previous listing. What do you think?

[quote Smallgoon]@Molip Can you give an indication on price? I've just purchased a 1 bed flat, not in East London (but I grew up in East London) - mine wasn't a doer upper but the immediate plans were to spend circa £30k renovating. It would be worth understanding whether your offer is a good one, even with the covid crisis, or whether the vendor is taking the piss, given others have successfully managed to renegotiate.[/quote]
£250k in E10... needs 10k max to renovate to live in and later on we'll spend around 20k to extend. (we did the full on survey to be sure)

@Jo4Laurie it will be miserable living in a 1bed with a child, but if our situation get dramatically worse I don't think anyway we would be able to afford a 2 bed to rent?

£250k in E10... needs 10k max to renovate to live in and later on we'll spend around 20k to extend. (we did the full on survey to be sure)

I think that's a good price for a 1 bed in London - what the sqm of the entire flat? Leyton isn't a bad area either. Personally, I wouldn't try to negotiate lower. In my experience, cheap doer uppers are usually in demand since people these days are keen DIYers, and it's obviously a much cheaper option than buying a read to move in property.

It's the opposite of what I've noticed. The "do-er-uppers" sit on the market for ages now. They used to be snapped up by builders who would arrive en masse and turn it around in a few months and stick back on market for £££ extra.

The tax changes over last few years mean it is not so attractive to just "rent it out, if it doesn't sell" mean that they builders aren't snapping up the do-er-uppers anymore. I see loads just sitting around for ages now.

@Fizzydrinks123 based on my friends who are FTB, doer uppers, particularly cheaper ones in London, are an attractive prospect, if you have the patience to do a lot of the work yourself. I personally didn't have the patience (or the expertise), and had the luxury of being able to fund my signficant reno works via savings. Not everyone is so fortunate.

BUT if we go through with the flat, we'll be paying £400 less per month in the mortgage than we currently pay in rent.

But you also need to factor in the upkeep, ground rent and maintainace charges.

Then think that they could fall 10% a year for the next few years thus loosing 3000ish every month.

I'd pull out and hold fire, they're already falling and wouldn't complete while things are so uncertain. Once furlough ends we'll have a better picture.

There's no chance they will increase any time soon, so don';t rush into getting huge debt.

Honestly if I could afford something nice I would go for it hahaha, it's just a 1 bed doer upper is what we can afford right now, and we've lived in shitholes while renting so something to call our own would be so good.

ok, the prices might fall 10% every year, but our circumstances will change this year (different job for my bf, banks will only lend if you have 20% deposit) so we might not be able to get a house in the next few years if we don't go for this one. (Our mortgage is approved for this one and broker said bank is fine with furlough, but it's unlikely we can get another mortgage).

@Molip
Are you sure you can get planning permission AND permission from the leaseholder to change the flat? I think you often have to purchase the demise from the leaseholder, which can cost lots of extra money.

Planning permission should be ok, we've talked to some builders. The flat comes with share of freehold so it would be fine.

Yes I agree they're popular with first time buyers and so they should be. However, those buyers have been prevented from buying them at all in the recent past as too much profit on offer for the builders and they got hold of them often before they went to market.

Recent changes over last few years means those builders aren't snapping them up before they arrive on Rightmove.

The price should reflect that there is now a smaller pool of buyers that would want to take on the work. Wouldn't snap one up myself or pay over the odds for one of them, as there would be another do-er-upper sticking on the market sooner rather than later (unlike recent history).

@Molip
Go for it!

@Fizzydrinks123 Wouldn't snap one up myself or pay over the odds for one of them

Define paying over the odds? £250k in London would certainly not be paying over the odds, unless it were an absolute dump and not habitable. Guessing this isn't the case for @Molip as the property wouldn't be mortgage-able if it were.

Completely understand you want to get something now rather than continue renting. Have you thought about looking a couple of zones further out to get more for your money? This is what I am now doing with my search. Depends what you want of course. Good luck!

Molip

If you are able to save the whole of your salary whilst in rented and still be spending £400 extra on rent then I don’t think you would be affected as much as others if interest rates rose.

If this flat is going to be a long term home then NE isn’t really going to affect you unless you need to remortgage.

We had an offer accepted right before lockdown. Were really excited about house and planned to put some money into cosmetic fix ups (kitchen cabinets, floors, decorating). After survey (nothing major found - but the message was that nothing had been well maintained so we were likely to get some surprises in any renovation work) and concern about Covid effect, we made a lower offer (5% lower). Vendor refused to discuss a lower offer. Relisted today at £100,000 more than our original offer! I feel like we dodged a potentially expensive moneypit ... but am amazed at the new listing! Dying to see what it actually sells for.

It always amazes me the sheer greed of some people!!! I would have thought if people are serious about moving then it's necessary to price realistically, especially at the moment. There seems to be swathes of new property coming on the market from my perusal of Rightmove. A few seem to be selling the same day as listing too. But there also seem to be a lot of reductions. We moved last year - despite all the Brexit angst we wanted to get on with our lives so bust a gut to show our period home in the best possible light and priced it realistically. It had certain quirks which wouldn't necessarily appeal to everyone. But we had loads of interest and sold for £5k under asking in a fortnight. I guess it depends with these sellers how serious they are about moving on. It's such a hideous business, personally I wouldn't want to drag it out by asking an unrealistdic price. It will also be interesting to see how many of the olds sold stc on Rightmove actually proceed to completion. Fascinating times.

this is an interesting thread...

www.mumsnet.com/Talk/property/3939530-What-s-the-housing-market-doing-near-you

I’ve been looking at commercial property to let. The prices are not dropping, I think the land lords would rather have them empty than reduce the costs tbh

I’ve just bought the one bedroom London flat I was renting for £1600 pcm. The mortgage is £596. Interest rates are really low. I think many people look at the capital cost and can’t get their heads round the enormity of the number. Whereas my friends and I see it as renting from the bank, but at a third of the price and with security of tenure. Interest rates have lowered even further during lockdown, and all the signs show they won’t be increasing because it would knacker what’s left of the economy. Ergo, cheaper to buy, even at what appears to be a mad price.

@breadcakebiscuits Agree 100%. Tried arguing this point on here a few weeks back and was met with "yeah, well you haven't taken into account the cost of maintenance and rapairs on a property - you don't have to worry about this when you're renting..."

I lost the will to live trying to explain that the price of rent does in fact take these sort of things into account. Can't imagine anyone would believe a landlord simply charges enough rent to cover the cost of their mortgage...

@breadcakebiscuits And congrats on managing to purchase! Would it be nosey to ask roughly where this was and what you paid? Did you pay market rate, or get some kind of a deal? Guessing you bypassed the EA?

@smallgoon I did pay the market price, but I was happy with that because it was a realistic price to begin with, versus what else was on the market (I’d been looking for two years, never thinking my landlord would sell, so had a very good idea). It wasn’t a private sale as such, because my landlord was stung on a clause whereby if the agent installs the tenant they collect if ever that tenant then buys the property. I’m in W3/W4 borders.

Won’t be sharing exactly which postcode and exactly how much because Rightmove would soon identify me and my home address!

Another thing: now I’m not restricted by my tenancy agreement (which forbade sub-letting), if I lost my job, I could move my sofa into the kitchen and give up my sitting room to a lodger - and their rent would then cover my entire mortgage.

The snag with high house prices is the deposit and stamp duty. It took seven years for me to save up, four of which I spent living in 4-person house-share which was not a walk in the park. Split up with my live-in partner shortly after moving in here, which scuppered the savings big time. I realise now - as do my parents - that they could have given me this security and peace of mind just by withdrawing some of the equity in their own house and allowing me to pay them back on the same terms. Instead I’ve struggled to establish myself - take professional risks and so on - because I’ve had no housing security since the day I went to university.

One last thing: another reason that I don’t think house prices will (be allowed to) fall is the government’s tax receipts from stamp duty, CGT and inheritance tax are tightly managed to ensure high revenues - the more homes that fall into the higher brackets, the greater the government’s take. Same with the banks - a larger capital sum repaid over 30 years is more profitable than a smaller one repaid over 25 years. We can all weep and wring our hands about the capitalist conspiracy, or we can just get on with our lives. This way I can plan for the future, which I certainly couldn’t do when I was lurching from one dodgy house-share to another.

For me I think thr optimisim works both ways, many buyers are optimistic prices have dropped and they will get a property they couldn’t otherwise afford and sellers are optimistic pricing has held and the market will bounce.

As usual sellers have the balance of power, because unless forced to sell they can hold on and reject low ball offers, which is what estate agents are saying is happening

@breadcakebiscuits We can all weep and wring our hands about the capitalist conspiracy, or we can just get on with our lives. This way I can plan for the future, which I certainly couldn’t do when I was lurching from one dodgy house-share to another.

Sorry to hear of the struggles, at least that time has now passed for you. I also agree with the sentiment. Lots of posters on here who are ready to buy but now wondering if they should hold out until 2021/2022... My advice is if you wait, there will never be a right time, the doubt will always be there. I purchased in Feb this year, despite being warned by several people (including family) that I should wait until a Brexit agreement is reached.