We've been wanting to buy for the last several years in our very expensive town, and instead of taking the plunge when we should have (last spring), waited and are now seeing prices rise significantly due to the limited supply of property on the market.
We recently saw and had an offer accepted on a house (bidding war) which is a nice but fairly bog standard 1930s semi, in an ok but ugly neighborhood. The property has been recently renovated - nothing too fancy but to a quite nice and reasonable standard, new boiler and heating put in, and it was extended quite significantly (floor space increased by about 50%).
The catch - the owners bought it exactly 2 years ago, in an estate sale, to do up - and the price we've offered is about 60-70% more than what they bought it for, and also about 70% more than what other houses on this street have sold for historically (though I don't know that any of those sold, had been extended beforehand as much as this one has).
I like the house though I don't love the neighborhood - we can afford it, it's the right size for us etc. But are we at risk of seeing the value drop very dramatically, based on what I know about the selling price for this and other houses in the street? Adding floor space and renovating adds value, but does it justify a 60% price increase relative to the most recent sale price and to anything else on the street?
Help! Not buying to sell on any time soon, but feel there may be a big risk of losing a lot of money here (house is over £500K).