Stupidly low offer

[Indablungerlow]

Selling house. Only been on the market a week or so. Received an offer of 50 - yes 50k below asking price. Really pissed off someone could be that cheeky. Anyone else received cheeky offers lately?

Omg really that's nearly 50% off

It is small 3 bed terrace, not the most attractive road but plenty of parking and close to schools. Its up for £155, been up since August, very good condition inside. New bathroom and kitchen.
Rightmove detailed it was bought for £78 in 2015 by current owner.
Its worth it to me because; i can afford to stay in a good area, albeit in an unattractive road next to a supermarket. It doesnt need work kids school and friends and my support remain the same. Very close to park and local shops.
Its the absolute top of my budget.

New or old terrace? Cavity walls or solid?
Solid walls means high bills, particularly if you are the end terrace.

@Mydogatemypurse I would go in at £130k.

Solid, end terrace,row of 3

There’s a surprising amount of threads on damp, cold walls, render, lime plaster, repointing etc on solid walls. They can be insulated but not sure how long the payback is. Obviously getting shorter with the high energy costs.

I’ve just offered £600k on a house that’s currently on for £700k (but been on the market a while and about to be reduced to 650k). I’ve also offered the same £600k on another house that had sold for £700k but came back on the market at £650k after the sale fell through. I think both are holding out for closer to 650k but I don’t mind waiting to see if they will come closer to the 600k. If they don’t then someone will soon, property prices are seriously going down. It will only bring them back to 2020/21 levels around here but the prices will be much more realistic.

‘Of course the housing market won't crash’

‘Why do you think that. My 2nd flat sold for half the price I paid for it in 80s
My ds bought a flat in may that was 25 k less than it was sold in 2017’

Precisely.

Several comments have come from those of us burned in previous market slumps.

Expect in coming months that negative equity will be an everyday fact of life for many & keys being posted through bank/building society letter boxes again (if a branch can be found). I remember building society letter boxes being sealed to deter keys being posted as it was a sadly futile gesture.

Online banking has changed the nature of consumer banking so failing mortgages will be less obvious & with no helpful people behind a desk to guide lenders, repossessions will come at a pace.

That's simply not true - not in the UK anyway. You cannot post the keys back to the building society ... and you'd still owe what's remaining on the mortgage and they'll sue you for it. And you'd be homeless in the meantime.
It works differently in the US ... but you shouldn't extrapolate from a memorable anecdote that you've once heard and believe it to be true for the general population.
It's actually the other way round - the banks will do anything in their power to keep you in your home ... they'll offer repayment holidays, then switch you to interest only, then extend the mortgage term, indefinitely if needs be. They want you to be indebted - it's how they make their money. And they really don't want to flood the market with repossessions because it would contribute to the risk of contagion.

the banks will do anything in their power to keep you in your home ... they'll offer repayment holidays, then switch you to interest only, then extend the mortgage term, indefinitely if needs be.

They didn’t in the late 80s/early 90s. When I bought in 1991 half the properties on the market were repossessions, if you can’t keep op your mortgage payments your house will be repossessed and sold. As you point out, lenders are there to make money, the way they do that is to recoup their loan and sell to someone who can pay.

It might not work that way, but people did it.

Hence the comment ‘futile gesture’.

The debt remained, any processes to repossess rolled on & the risk of homelessness remained.

At the time, people did post - or rather put - the house keys through the bank/building society letter box as a desperate measure or as expression of desperation. It was a very difficult time, particularly for those who had recently bought high as many tipped rapidly into negative equity. Most were in a position where they could stay put, keep up the repayments & ride out the storm. But for some who needed to sell due to partnership breakdown or couldn’t afford the repayments, being forced to sell inflicted a sever financial blow.

The brutal reality is that in the late 80s, some people lost their homes through repossessions, & any remaining debt after the forced sale was still owed to the lendor. It took many years to pay off that debt with nothing to show for it.

As @Blossomtoes points out, repossessed houses were sold - often at auction - so that lenders could quickly recoup their money as a lump sum or a new consumer loan.

As @Mark19735 points out, lenders will go some way to help problems with payments by reconfiguring the debt. This is far easier done face to face with someone in the branch.

My point is that consumer borrowing now, compared to the 80s, is now mostly online & the opportunity to speak with someone - dare I say friendly - in the early phase of struggling with payments is less likely.

I took a look online at the housing market in my immediate area. Normally, the local market is buoyant & brisk, with a broad range of properties that sell within weeks.

Since I last looked roughly 8 weeks ago, there is a significant change. Many properties were discounted in late October/early November, the nicer ones are marked as sold.

I call that out as a local correction as the market is still buoyant.w

I personally know two people who had houses repossessed in the 80s. It happened. I agree that it is absolute last resort, more now than then too, but it’s no urban myth.

I hadn’t thought about the difference between branch and online banking, but it’s so true. The first contact being a member of branch staff, however junior, and a call centre operative reading off a script, is very different. You get some excellent versions of both, but also not, and the ability to escalate in a call centre is so much less.

My friend at work was repossessed, it was completely humiliating for her as she lived in the same road as our company. Big piece of wood across the front door with a padlock, and her possessions in the skip :(

Was this recently, or in 1985?

No one is claiming that repossessions in the 80's were an urban myth. I lived through that time and remember it well. But there were other factors in play - whole industries were collapsing and the entire working populations of towns with only one employer - a colliery, or steelworks, or shipyard, or car plant - were being made redundant. So there was a double whammy of people being unable to pay their mortgages because they had no jobs, and no-one else wanting to move to a town that had near 100% unemployment. That pushed house prices down a lot in some areas - but in the south east for example, they continued to rise throughout this period. Whilst today's economic outlook also has severe headwinds, any recession won't play out in the same way. Far more people have knowledge-based jobs not factory-based ones, and can work from home.

And ... the lenders are regulated differently now. Remember that your mortgage is their asset, and they have to account for changes in the value on that asset on their balance sheet. They really, really don't want to write down those values or do anything that might cause a systemic reduction.

I'm also not saying that the banks will indulge people whose financial position is in terminal decline indefinitely, either. They aren't charities, and there will be some level of repossessions. But, any forced sales are unlikely to all be in the same town, and there will still be plenty of people who do have jobs who will want to live there.

The 2020's will be different to the 1980's. Possibly bad in other ways, but history won't repeat itself exactly as it happened then.

but in the south east for example, they continued to rise throughout this period.

No they didn’t. The market I bought in which was flooded with repossessions in 1991 was Wokingham, in the heart of commuter belt Berkshire. Property sat on the market for months there and there was widespread negative equity. It stayed like that for ages, the market was slightly better when I sold again three years later - for exactly what I paid.

- but in the south east for example, they continued to rise throughout this period.

Oh, I must be imagining my flat in West London (zone 4) which I bought for £65k in 1988 and sold in 1995 for £38.5k.
Hint - I'm not imagining it.

"when I sold again three years later - for exactly what I paid"

Not rising is not the same as dropping. Your flat didn't fall in price.

"my flat in West London (zone 4) which I bought for £65k in 1988 and sold in 1995 for £38.5k"

OK - that's pretty unlucky. But what's the story? Was it a leasehold? How many years were left on it? What were the service charges? How far west was it - did the Heathrow third runway planning decisions in the early nineties have an impact? And ... did hundred of other people also sell for 40% less, or were some of them more like the previous anecdotal comment from the same era and slightly further west, and simply sold for what they paid? What was it about your flat? Or about your circumstances, that made you accept this deal?

That's my point - you can't tell. No-one can - making assertions about what must happen, based on what may have happened in a different transaction, that will determine what will happen in the next. Each house is unique. Each potential buyer is unique. Each seller is unique.

@Mark19735 it was 1993, I remember the date because I was pregnant with my son. She turned up at my house later that night asking for money to get a flat, she had been put in a separate hostel to her children :( and her dog had been taken to a rescue centre. Unfortunately we only had a small amount of savings to see us through six weeks on maternity pay (14% mortgage with Birmingham Midshires), and didn't have a penny to spare. All we could do was give her half our dinner (we were that skint) and money for a cab back to the hostel.

That's pretty miserable. I expect the local authority ended up spending more on hostels and social services than it would have cost to loan her the money to keep up with her payments. They do that nowadays ... housing benefit can be paid to a lender to help cover interest payments - a much better system.

It was terrible and I felt very two faced as she was always asking to 'borrow' money at work and would never repay me, I'd started avoiding her. I was astonished she turned up at our house. I forgot that she also asked to use our landline to ring her husband in Spain, we were very broke and nervous about an international call but my husband agreed.

When I retired I found out from other colleagues she'd also constantly tapped them too. Very sad. I saw her ten years later pushing her husband in a wheelchair - seemingly after that fateful phone call telling him they'd lost the house he had a stroke. Terrible times.

in 1993 i bought my current house. I sold my flat to the building company in p/e. I had paid 56K for it in 88 with a mortgage of 42k . The building company gave us 42k for i, they sold the flat on for £25k the same day

My MIL's flat which was purchased for 70k in 1989 was sold for 40k in 1996. It was share of freehold, 1 bed period conversion. However, it did mean she was able to buy a bigger house for her growing family. This is in zone 3 north london.

This chart covers the 80's and 90's. It's from Nationwide, and it is an average index for all regions. The drop from peak 1989 to bottom 1992 was about 20%. That's an average ... so some will have fared worse, others will have fared better. Some will even have experienced gains. (I know this from experience). But ... of all the people who bought in 1989 and all the people who sold in 1992, hardly anyone (*) bought in 1989 AND sold in 1992. Many of the sales in the early 1990s were people who'd bought in the early 80's and they still sold for more than they paid. Many of the purchases in 1989 stayed put for 10, 20 years and made a tonne of money when they finally sold in the 2000s.

(*) Disclaimer ... the internet is a big place, and 'hardly anyone' from a potential pool of millions of Mumsnet users might still be hundreds and hundred of cases ... but my point is, statistically, they are an anomaly. Anecdote is not a substitute for evidence.