How to make a cheeky offer without alienating seller/EA?

[User7164]

Hello!

We are first time buyers and have been house searching for the last year or so. Recently found a house we love, good area for raising our little one schools nearby and a quiet cul de sac. The house is listed for £450K and has been on the market for >5 months.

The average selling price in the street is quite high with a few (bigger houses with bigger gardens) going for 450-500k, but we feel for the size and garden size of this one, and the money we’d need to invest in replacing all bathrooms and upgrading kitchen (and perhaps an extension) that it’s not worth 450. In all honestly, I think it’s around 100k overpriced.

We think our absolute max that we believe the house Is worth would be 400k. We want to go in with a low offer, but I’m cautious as the last time we offered 15% below on a house we liked the EA basically cut us off. I don’t want to offend the seller at all because they were so lovely!!

Any tips on how to go into this? Thanks!

It’s not a great time to be selling but it is a reasonable time to be buying imo given that prices have stagnated or slightly fallen in most areas. For people upsizing it’s not a bad time as they can hopefully save more money on the pricier house than they lose on the cheaper one. I personally think prices will start rising again once we see the first couple of bank rate reductions as that will affect market sentiment. Though the rise will be slow at first because interest rates will still be relatively high.

If I was getting a mortgage right now I would be waiting until after February 1st just to see if the BoE base rate falls. However there are already some better fixed rate mortgage deals out there than we have seen for many months based on the expectation of where the financial markets expect rates to go.

If anyone wants a reasonable source for interest rate forecasts, I'd recommend Capital Economics. They have forecasts at the bottom of their U.K. page.

Looking now, they forecast the base rate will drop to 5.0% by Q2 2024, then 4.5% in Q3 and 4.0% by Q4. Obviously dependent on inflation and also mortgage providers will be pricing this into their fixed rates.

Thanks - I see that they are also predicting that U.K. inflation will fall below the 2% target in April