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?

Mark - with the greatest respect, yer talking shite hen.

The people who bought my first house subsequently sold it for less than they paid us for it. In the north, that was reality for many people for a number of years after the 2008 crash. A UK average figure is useless because prices were soaring in London during that time, but stagnating in many other areas.

And that was a freehold semi-detached house in a fairly average suburb of a northern city.

i think it may be the reverse this time. London falling but houses in the north maintaining their prices.

This is not evidence that refutes anything that anyone has said.
It is average statistical data on sale prices from Nationwide.

Are you accusing posters of making things up? They sound pretty clear to me.

For example - this site shows a graph of NE house prices, by house type (second graph from the bottom of the page). Anyone who bought in 2007 and sold before 2015 could well have made a loss. That's not going to be a rare occurrence.

www.plumplot.co.uk/North-East-house-prices.html

But hey, obviously London is the centre of the world and anything that doesn't happen in London isn't real, eh?

In fact, having looked at that graph again, even in 2021 the average price for a flat in the north east is still below the 2007 price. It's likely that quite a lot of the people who bought a NE flat will have sold in the subsequent 14 years.

While properties may have been doubling in value every few years in London in the 2010s, that was not the case elsewhere.

Who is plumplot? Is it reputable? Why not just use ONS data directly on its own?

www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/august2022#house-prices-by-region

You can find a time series of prices and you can elect to show the graph for as far back as you like.

Look at that then. It'll tell you the same thing. I didn't actually need to look it up to know what NE house prices have been doing.

The fact is that national averages for house price growth are useless because growth in some areas (London + SE predominantly) has been staggeringly huge compared to elsewhere.

Agreed. So London centric on here! London is its only, small bubble in many ways.

my example above was in London

@rainingsnoring - Fail your English GCSE by much? Your reading comprehension leaves a lot to be desired. I am not saying anyone is making anything up. I am saying that anecdotes ... even hundreds of them ... do not constitute better evidence than actual empirical data. Every dataset will involve some degree of aggregation. Combining regions may not be sensible if you are interested in differences between regions, but we were discussing differences over periods of time, so it is a perfectly valid thing to aggregate regions and use a national sample. If you want to have a North/South divide chat, that's a different topic.

I'm also not looking to refute anything people have said. Their experiences are valid and meaningful to them. I'm just saying that the personal lived experiences of one or two posters, or anecdotes based on what their mates have told them, is far more likely to represent outliers (which is why they are memorable) but they are not statistically relevant. Very few people are going to come online and post 'yeah, my experience is actually bang on the average trend - what I observed was utterly unremarkable' ... and yet this perspective outweighs the juicier stories by 10 to 1, and this is what actually moves the market.

You should not generalise trends for the entire market based on tens, or even hundreds, of stories on the internet. Or rather, if you do, you may make bad decisions that you later regret.

Mark,
Thete was nothing wrong with my property at all - these drops were absolutely typical in the outer London suburbs. I bought in '88 because of a job move, and moved again in '95 for another job change, I wasn't unique or even unusual in that.

The huge blip in repossession figures below (from Ticfinance.co.uk) starting in 1990 would seem to suggest that very large numbers of people were indeed hit by this despite your denials. For comparison repossessions currently run at about 5000 per year.

So from 1990 to 1996 there were over a third of a million houses repossessed in the UK.
Anecdote Pretending everything was lovely is not a substitute for evidence.
1999 - 29,900
1998 - 33,900
1997 - 32,800
1996 - 42,600
1995 - 49,400
1994 - 49,200
1993 - 58,600
1992 - 68,600
1991 - 75,500
1990 - 43,900
1989 - 15,800
1988 - 18,500

Combining regions may not be sensible if you are interested in differences between regions, but we were discussing differences over periods of time, so it is a perfectly valid thing to aggregate regions and use a national sample

Sorry, but this is nonsense. A national sample is only useful if all areas experienced the same general trends. And they didn't. Some areas were experiencing steep growth while other areas simply were not - averaging the two makes it look as though nowhere had lower prices for any substantial length of time.

I never said it didn't happen. I said it was comparatively rare. There are 100,000 property transaction per month on average. Fifty thousand repossessions per year is only 4% of that ... miserable for those affected, but statistically irrelevant to the 96% of market participants who aren't.

"For comparison repossessions currently run at about 5000 per year"
... that's kind of my point. It's dropped by 90%. I said the 80's and 90's recessions were different, and that the 2020s won't play out the same way.

A national sample is only necessary because different areas experienced different trends. Otherwise, you could just pick a small regional sample and extrapolate from that. The discussion was about the 80s and 90s recessions compared to today, not London versus the rest of the country.

I think our disagreement stems from something different. You seem to believe that house valuations exist, separate from any one house, the owner, and the buyer. I don't. I believe that house valuations for an individual house can only be determined at the point that house actually sells. In between times, no-one has any idea. I may have been in negative equity many, many times since I bought my home ... but I'd never know. You might believe that some index is a pretty good predictor of what a sale might achieve, but until you actually sell it you'll never really know how accurate it truly was ... and chances are, it won't have been all that accurate anyway. I might believe that Mystic Meg is a better predictor of what a sale might actually achieve, but unless it sells, I'll never know either.

What I do know is that the number of people who actually sold for less than they paid is a tiny, tiny fraction of the total sales. That is true going back 30 or so years, in all parts of the country. The data is publicly available, and the dataset is huge - so it is valid and reliable.

My contention - the thing I can't prove - is that where people did sell for less (and I accept that there may indeed be hundreds, perhaps even thousands of cases of this), there will be a story behind that that has more to do with specific circumstances at that time, for that house, for that seller than it does with the housing market in general. I can't prove that - but it's a narrative that I think the evidence that is available supports.

Oh .. and those charts showing flats in the North-East still selling for less in 2021 than in 2007 ... yes, the line shows the average price for flats hovering at £120k, dropping to £115k. That's a 4% drop ... over more than a decade. There's likely to have been just as much influence due to stamp duty changes, or different mortgage products available to buyers at the time as it was to differing negotiating positions and circumstances affecting sellers. If it was the reverse, I wouldn't call it a rise either, I'd call it a flat line. So technically, you're not wrong ... but I think you're stretching a bit far to say this is evidence of negative equity. Remember - I'm responding to @UniversalAunt stating that "negative equity would be an everyday fact of life for many & keys posted through bank/building society letter boxes". I don't think any of the people with £5k negative equity you've identified are contemplating that future - which your data on repossessions also supports. So we agree,sort of, right?

UK Repo figures 2004 to 2016. (same source)
These would suggest that the impact of the 80s and 90s recessions was not markedly different from the one following 2007.
Why should it be different now? (even if you do think those impacted are statistically irrelevant)

2016 - 7700
2015 - 10,200
2014 - 20,800
2013 - 28,900
2012 - 33,900
2011 - 37,300
2010 - 38,500
2009 - 48,900
2008 - 40,000
2007 - 25,900
2006 - 21,000
2005 - 14,500
2004 - 8,200

75,000 in 1991 v. 7,000 in 2016 ... seems a big swing to me ...

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

It was a house and the price fall had happened before I bought it. My vendor sold to me at a loss.

75000 in 1991,
8200 in 2004,
49000 in 2008
7000 in 2016

Well it looks like a cyclic model to me but feel free to completely ignore the numbers in the middle in order to present a completely fallacious conclusion.

@Mark19735 - when I see someone starts making stupid insults, I just conclude that the person has nothing sensible to add.

The way you are cross questioning posters about their properties which apparently sold for less than they were bought for suggest that you don't believe them. In addition, these posters responded to your totally un-evidenced assertion that house prices did not fall in the SE.
You keep talking about anomalies as if they were all anomalies. They weren't anomalies; this happened to lots of people around 1990. The evidence that you linked to from Nationwide shows house price falls in a couple of time period. I'm not sure if it inflation adjusted or not. This is Nationwide's historical data of average UK house prices. It it is useful but limited as are lots of anecdotes from people here. I don't agree that they are necessarily less relevant. For example, people writing on here about their current experience of the housing market in various areas is more relevant currently than ONS data on sold prices or Nationwide mortgage data which has a long time lag. They also might talk about regions of the country whereas national data (such as the chart you linked to) looks only at national averages.

'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 just wanted to comment on the above from earlier.
The great majority of mortgage debt is actually sold on by the banks now to investors or one sort or another. They are therefore not all sitting there on the balance sheet.
I think it's fair to say that the recession won't play out exactly like the 1980s/ 2008. Personally, I think it is apparent that the UK is in far more serious now than it has been in the past and that we have built a massive debt pile surrounded in part by fictitious housing 'wealth'.

@Mark19735: "..where people did sell for less (and I accept that there may indeed be hundreds, perhaps even thousands of cases of this), there will be a story behind that that has more to do with specific circumstances at that time, for that house..."

Yes, I agree with this contention and I'm sure that very many people would not sell and put themselves into a negative equity position unless they had no alternative but to move.

Negative equity is obviously more of a risk for those who are forced to sell, particularly after a period of rampant house price rises where buyers over-paid in an attempt to get on the housing ladder.
Sadly these factors may well apply after price rises in the past couple of years, with the very real possibility of job losses in a shrinking economy and subsequent house moves for new employment.