Current property market - how much over asking price are you offering/accepting?

[erhsla14]

Also where in the UK are you based?

Just trying to get a feeler for what is happening out there currently. Possibly also trying to make myself feel better for making what feels like a really significant over asking price offer but could just be due to FTB nerves etc.
With the current property prices/market, it makes me wonder if prices are bound to crash and if I'll be making a loss whenever it is we sell down the line...

We had an offered accepted at 4% (12k) over asking price, I don't think we were the highest offer but we wouldn't have been far off.

We had offered 7% over on another house, but they went with a cash offer that was slightly lower

Offered asking price on an offers over house, as did three other viewers (none offered over). Vendor didn't accept any of them. House is still on the market 3 months later, I think the vendors don't actually want to sell or move.

Now waiting to see if our mortgage valuation works out. I'm tense.

"Offered asking price on an offers over house, as did three other viewers (none offered over). Vendor didn't accept any of them. House is still on the market 3 months later, I think the vendors don't actually want to sell or move."

EA told me that some vendors put their houses on for silly money as that is what it would take for them to move. Basically, if they can fleece someone they'll go. Anyone offering realistically will be rejected.

Also come across vendors asking crazy prices because that's what they need to buy the property they're interested in, without considering whether it's realistic or achievable, just wishful thinking and chancing their arm.

I feel sorry for anyone overpaying now. Prices won't fall but they'll stagnate for a few years and vendors who want to sell will have to take realistic offers.

Thanks everyone.
So, for all of these overinflated prices - do we think prices will just keep on rising for when it comes to eventually selling for those of us buying currently? OR would house prices plateau? What is the likelihood of actually making a loss if selling in a few years time?

I don't think you'll make a loss but if the likely hood you've over paid you might not make much or any profit . Int rates are rising and overpaying now would not be a good idea . I think that's why things are calming down .

I think people paying over-the-odds, particularly for new builds, will be selling for less (if they need to) in a year. Most people will see prices plateauing and stagnating, which will result in realistic offers being accepted. Only those with a vested interest in bolstering confidence - estate agents and building societies - are publicly predicting continued rises. If you talk candidly to people working in property now, they'll admit that their companies are forecasting plateauing prices by the third quarter.

I like Bloomberg for an objective view here

It's an opinion piece but echoes what I'm reading elsewhere.

I’m an associate director in a national real estate company, I work in the rural estates department so I’m management rather than transactional property but I have two transactional analysts in the team who are all modelling horrible trends in the next 12 months.

If it looks like a bubble and it behaves like a bubble, it’s a bubble. When it bursts (and it will!) your mortgage is fixed in at the price you paid, at the valuation at that point, not what you lose in the crash. And let’s all remember that most mortgages are inflation linked. I think people are genuinely batshit paying 10%+ over the guide.

I'm sorry but I agree with @daisymade. As I said earlier on the thread. I would be v careful at present.
All the economic signs are pointing to a recession probably a big depression. We have rising inflation which is going to get worse, the bank are likely to be forced to raise interest rates more, we are likely to see increasing defaults as the cost of living puts more pressure on people. With that backdrop it seems fool hardy to be paying over the odds.

i think it depends on your situation. There’s no one solution for everyone. If you currently own, are paying capital, and don’t HAVE to move, then you probably can wait to see if house prices reduce.

But if you rent at £1000 a month and can get a mortgage at £300 a month for the same size and location, it would be a very different question, and I certainly wouldn’t call them batshit. I don’t think it’s ever a good idea to overextend yourself (ie max borrowing) or plan to buy a house to keep for only a couple of years. But if you have financial safety nets, even in the event of a house price crash, or dip, you can wait it out. My parents couldn’t move in 1989 because of the crash so they stayed put for another few years and it was fine.

Inflation and recession doesn’t address the large problem of shortage. Since the 2007 recession, banks had to tighten their lending a lot so the volume of defaults won’t be repeated. People who can stay to avoid selling at a loss, will. And this reduces the number of ‘starter’ properties available. Which keep demand and competition high.

If people are losing to cash buyers now, it will get worse. if there’s a house price crash/ slump, with higher interest rates, cash buyers will clean up on houses while those needing a mortgage meet stricter criteria. So again, if you’re currently renting and will be a FTB, you’re not necessarily going to be hugely helped by a crash/ slump.

Huh? Are you one of those crashists that has been waiting to buy for decades. It’s not crazy if it saves you on rental in the long term and prices go higher anyway.

@erhsla14 I think many agents are under pricing (seen lots of OIEO) To stimulate biding wars, it creates a sense of loss and competition and people are pressured to pay more. I have lost 3 bidding wars this year after offering 20-40 % over the price.
Ive just offered 10% over the guide price on a house and the vendor has said although the price I have offered is acceptable he is continuing viewings as I am under offer to buyers who are in rented but need a mortgage and he prefer a cash buyer.
Its Grim for buyers atm.

I'd bet that those saying it's crazy to offer over the odds are already homeowners with no current need to move.

We're crazy FTBs who offered 9% over the asking price for the house we're buying. This was after nearly a year of offering asking price on houses, increasing a few K at best and finals, but losing out each time to cash buyers. We went in higher on this one and it worked.

What was the alternative...staying in our private rental which is already a bit more than our mortgage will be, with absolutely no security. We've been here years so our rent is a good £300 a month less than similar stuff coming on now...would be a nightmare if our landlord wanted us out.

We're also in our 40s so we have to do this now to get an affordable 25 year term.

No we are soon to be FTB I only say it's crazy to go over because everything is being reduced round by me .

@Bedsheets4knickers where are you based?

I was hoping for loads more to come on the market after Easter and that things would calm down a little. Where I’m looking in the NW, everything that was up before Easter is now listed as sold after bank holiday viewings.

We are west essex , one house was up for 550 then 525 now 500 . We would of took it but we are about 6 grand shy annoyingly, it'll be gone buy the time we are ready to go in July but tbh . I'm happy to sit back and just watch the market right now .

We are chain free & staying with family. Missed out on 2 properties but tbh I'm getting a little anxious & am lowering my budget. Do people think the BOE will raise rates next month? And there does seem to be murmurs of a recession. Making me panic

We sold last August for 10% higher than asking. We did have a higher offer but chose the couple in the most proceedable position.

These two things are contradictory. You don't raise interest rates during a recession. If there's a recession, rates will fall.

There’s definitely an element of underpricing. There’s one agent who always prices low, I think to get people viewing and offering at best and final. They always sell for at least 20% over the guide price!

We offered 10% over but that’s only 2% more than the last house on the road sold for in Summer 2021. Seems about right given the rising prices and the fact the house we’re buying has a garage when the last one sold didn’t.

Staying where we are is a luxury we don’t have so we’ve bought a bigger house that needs work in the hope we can add some value and grow into it while we weather any market turbulence.

These two things are contradictory. You don't raise interest rates during a recession. If there's a recession, rates will fall.

Who said that? we aren't in a recession now are we?

That's the point the BOE are in a bind. Originally the inflation was thought to be just external pressures & tinkering with interest rates wouldn't have much of an impact. Now there are secondary pressures eg strong job market so interest rates may go up to temper it. But will the impact of said raises tip us into a recession.

@nairyw

No we aren't in a recession. I said if there's a recession.

Retail sales are already falling so it's quite possible that we will enter a recession within the next 3 or 4 months. That will squash interest rate rises.

I don't think that house prices will fall much regardless. There are too many international buyers. I've read a lot of articles recently about how buyers from Hong Kong are snapping up properties in the South East. UK property is still very cheap compared to places like Hong Kong.

But you replied to my point saying it was contradictory. I never said we would have high rates & a recession at the same time.

I don't think prices will fall much either but i'm anxious at buying at peak & don't want to stretch myself.

We may be at the start of a recession now but we don't yet have the figures and won't until the end of the Summer.
However, with rates if inflation as high as they are and rising and interest rates at 0.75% and therefore very negative in real terms, I doubt they will lower rates. In any case, they don't exactly have much scope to lower them from their extremely low level. The bank are in a bind either way. The economy is in huge trouble.
I agree with other posters who said it may still be in some people's best interest to buy now if they are paying huge amounts in rent, etc. The OP did specifically ask about falling vs rising prices and mentioned selling within a fairly short period, I think. In my opinion, she may well lose money if she does this but clearly others disagree. I guess it's a long time since a major fall in house price values.

We are in the East Midlands and have recently accepted an offer and had offers accepted as follows:
Our house on the market for £379,000 & accepted offer of £375.
1st house we offered on was OIEO £335, we had £345 accepted.
We then pulled out of that for a number of reasons and since had an offer of £460 accepted on a £475 listing.

That's good to hear