Has the housing market gone insane? Making offers well over selling prices

I’m renting in SE London. I was going to buy the flat but when I found out the service charge was £190 pcm (about 50% of which is a sink fund for repairs) and the estate agents valued it at £300k I decided this wasn’t a good deal…

Mouseprice tells me that 2-bed flats in my road (by no means a great one – 2 bus routes, used as a rat run and a railway behind the flat) went for £210 in Feb, £240 in May, £250 and £270 in August.

Apparently after one open day, there’s been 4 offers at the full asking price of £300k…

I’m assuming that the buyers have either not asked about the service charge or looked at Land Registry Data and are happy to throw away £30k + interest.

Are people that silly about buying houses? If it was a great flat in a nice area I’d understand but it’s really nothing special…

you’re assuming that the money is being borrowed.

It’s London. Totally different from the rest of the Country.

Yep, got a friend trying to buy in Walthamstow, similar story. He put an offer in for a flat, it sold for £25,000 more than what the vendor was asking for. I think it had been on the market for two days…

Yes, in London.

You can get a 3 bed farm house with a barn and 10 acres for £300k in West Wales. Bit of a commute though.

Full asking price offers are not unusual in London, whether it’s “insane” depends on your perspective.

You’ve posted a lot abotu this flat, perhaps it’s time to let go emotionally?

😉

Of course it’s insane. It’s got massive speculative bubble written all over it.

£300k for a flat in London is quite a low price in absolute terms. My mates 2 bed’er in Battersea is £750k, similar in Borough/Bermondsey.

London property has been very hot for more than a year. Weak GBP and no capital gains tax for foreigners makes it attractive. Easy to rent out. These buyers are generally paying cash.

I am currently trying to sell a house, everyone these days looks on Zoopla and tries to bid around the last sale price thinking that’s “correct value”. You can see from the trend on this road that an “uptick” of circa 5-10% was likely plus in any case perhaps this flat was better than the others.

London. I don’t know how you guys do it.
It is bad enough here to be seeing house prices sneak up again… 🙁

I moved back to london and managed to buy a nice house/nice area around the time of the slump and, having lived in newcastle/edinburgh/chester, I’ve been pleasantly surprised our house valuation continues to rise despite the UK house market pretty much being in the crap for the last few years. We’re not even anywhere near the centre or a tube… its a leafy suburb here.

London definitely has its on micro climate in the housing market.

Just dont understand this, houses around me, rural North East Wales have been up for ages some drastically reduced some not, probably due to negative equity.

Wheres the jobs boom to fuel the prices and I dont mean the figures banded around by government stato’s, good secure well paying jobs that will allow people to make these types of commitments

I am currently trying to sell a house, everyone these days looks on Zoopla and tries to bid around the last sale price thinking that’s “correct value”. You can see from the trend on this road that an “uptick” of circa 5-10% was likely plus in any case perhaps this flat was better than the others.

Except that if you’re trying to sell and not succeeding, it’s by definition overpriced. Perhaps the other houses have something that yours doesn’t, or they were just lucky?

Pook started a thread recently, I say LET IT GO. Yes London is different to a degree but only recently did people who pay over the odds find out that they are now sat on properties in negative equity.

**** that. If someone gets buy-fever let them at it. Especially as you describe about the bus route/train back etc.

London is effectively an independent city state, with no relevance to the rest of the country. The property prices are utterly bonkers. But its fuelled by foreign speculators with oodles of ready cash. And as a buyer, how can you compete with them? You can’t. And frankly you’d be an idiot to even try, because they can’t really lose.

Just allow yourself a wry smile when the arse drops out of it. As it does with every artificially inflated bubble. Shouldn’t be long now

Welcome to 2003-2007.

I do not envy any of you attempting to buy a home. 😐

Wheres the jobs boom to fuel the prices and I dont mean the figures banded around by government stato’s, good secure well paying jobs that will allow people to make these types of commitments

In the same way that the housing market isn’t homogenous in the UK, neither is the job market. There are parts of the UK that have lots of high paying jobs; London is one of these places. Consequently the house prices in these areas are significantly higher than other areas where wages are much lower.

Bus and train routes, why not use there bikes, theres seems plenty of available finance to set them up in London unlike the rest of the country

Oh, and let them eat cake 😆

Desirable area then yep prices will go up.

And in growth at last count i believe aberdeen topped london in terms of %

They litterelly cant build enough houses to meet demand in aberdeen. They are building all over the place.

Even renting. Mrst -r sister viewed a flat for rent, 2 bed in town and there were 80 folk viewing it.

Bubble tastic, i plan to extend over moving thats forsure.

It’s a flawed supply and demand model. Investment buyers don’t care about price, they care about yield.

It’s been similar in this part of Surrey for the last few months too. Plenty of the better spec’d 3 and 4 beds going for well over the asking, some allegedly receiving more than 10 bids! Those are shifting in the first week too.

We had offers accepted in the summer on two houses, but only by going over the asking (on blind auctions). Unfortunately structural issues have seen them both fall through, the second of which had us dealing with the most incompetent agent possible and the biggest ****** of a vendor I’ve met in a long time.

Recently had an offer accepted on another house at 10% below asking. All in all a bit of a weird market still.

EDIT: Plenty of sales have been falling through it seems, as loads have been SSTC for months then suddenly back on. And others have dropped 5-10% overnight.

Full asking price offers are not unusual in London, whether it’s “insane” depends on your perspective.

You’ve posted a lot abotu this flat, perhaps it’s time to let go emotionally?

STW offers great perspective 🙂

where I am in london there isnt foreign investment. the areas where that occurs is central areas, posh areas, chelsea, westminster and close in town. theres lots of other areas where people just want to live and I dont believe the inner city foreign investment greatly pushes ‘ordinary’ house prices up greatly outside of these areas, a little but not that much. The market here is simple supply and demand.

I get really bored with envy bashing. 😉

The market here is simple supply and demand.

It’s not, though, because there are two types of buyer, both with radically different constraints on pricing. A home buyer has to be able to afford the mortgage out of income. That’s a pretty simple variable.

But an investment buyer, if they have enough equity, can basically acquire properties sequentially at no “operational expenditure” cost. They’re making a big leveraged bet on house prices, not buying a home, and there’s a much less rigid ceiling on prices as the bubble inflates (prices go up, less homebuyers, more rental demand, higher rents, better yields, more investment buyers after ‘free money’, house prices go up, less homebuyers, more rental de… POP)

You honestly think any of us envy you for living in London?

I suppose you have to keep telling yourself that, to make it somehow bearable 😆

It’s turning around in London – at least at properties I’m looking at…

http://www.standard.co.uk/news/london/st-johns-wood-mansion-with-11-bedrooms-10-bathrooms-a-gym-and-underground-parking-has-65m-price-slashed-by-half-8961568.html

You honestly think any of us envy you for living in London?

I **** love London. If I could afford I’d be down there again not sitting in redbrick shitholeville.

We’re currently selling our property and buying a new one in West Berks.

We accepted an offer of £20k more than when we bought in 2007, 3 weeks before the market fell apart. Our asking price was £12,500 more though.

The property we’re buying we paid £12,5000 below asking price after negotiation.

Don’t let the door hit your arse on the way out, will you?

seriously people buy little flats in London for £300k/£750k??

where us yorkshire folk can buy a nice biggish 3 bed house near the moors for £135k with loads of room, garden nice and quite and best of all mountain biking straight from my house.

Think i might move to London

Where London leads the rest of the South East will follow as people look further out to escape the bubble and, ironically, end up expanding it.

Had an offer accepted on a property back in May but the deal fell apart as they weren’t able to vacate and after 6 months of being told we could exchange any day now we had to walk away to keep our buyer.

The house is back on the market at 35K more than we were going to pay and they’ve had 20 viewings in a week. Anywhere with good transport links to London will be in the same boat.

Mental

My house has gone up £100,000 since 2006. It’s mental.
Our mortgage is paid up next month but for us to get a slightly bigger house will cost us another £100,000.
We are staying put.
There’s no way the younger members of my family will be able to live within a 100 miles of us.
No doubt we will end up with shanty towns on the coast and workers bussed in to do the shit jobs.

seriously people buy little flats in London for £300k/£750k??

where us yorkshire folk can buy a nice biggish 3 bed house near the moors for £135k with loads of room, garden nice and quite and best of all mountain biking straight from my house.

Think i might move to London

You have no idea, it really is crazy. It does feel like a bubble. I think that a lot of the pressure on the housing prices comes from the fact that there is competition to buy or rent from people all over the world, not just the UK.

You don’t even bloody live in Manchester binners!

when we started out on the housing market, my parents and the”older” guys I worked with at the time said as a rule of thumb one weeks wages should cover your mortgage, the rest of the month spread over other bills and spends, i have always maintained this philosophy

so where does this fit into the “modern” concept of living. maybe sensible and safe is what we should return to

when i see job adverts locally i cannot understand where the drive is coming from the push prices up. yes there maybe a lot of interest in a property but affording it is another matter

I bought my house with a 3x salary mortgage. I’d need a salary of over £180k to buy it now using the same criteria!

A mere £700k will get you this 3 bed terraced house in Reigate! The agent told me 3 months ago that the owner had already dropped over £100k! I know the road – nothing pretty out the front and only a courtyard to the rear, overlooking the church, another house and the supermarket! Just because it’s in Reigate and close the park is just bonkers.

Linky here as it won’t carry over: http://www.rightmove.co.uk/property-for-sale/property-43548794.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E1119%26insId%3D1%26minPrice%3D650000%26maxPrice%3D900000%23_includeSSTC%3Don%26auction%3Dfalse%26includeSSTC%3Dtrue%26lastPersistLocId%3DREGION%255E1119%26locationIdentifier%3DREGION%255E1119%26maxPrice%3D900000%26minPrice%3D650000%26previousSearchLocation%3DReigate%26radius%3D0.0%26searchLocation%3DReigate%26searchType%3DSALE%26topMatchPersistRegIds%3D1119%26useLocationIdentifier%3Dfalse%26box%3D-0.21297%2C-0.20572%2C51.23512%2C51.23890%26popupPropertyId%3D43548794&fromMap=true

and the consequences of over extending,

@footflaps – you need to look at debt service too – interest rates are much lower. Also when I left Uni in 1985 people used to club together in 2’s and 3’s to buy properties, so this phenomenon isn’t anything new

OP that flat is also very attractive under Osbourne’s help to buy scheme. Also the money going into the sinking fund will be for improving the property and it’s value, once that work is done I would expect the value to go up again and of course the service charge to go down.

I am not glad about the jump in London prices as I looked to buy in 2011 and didn’t, I will hopefully be buying in 2014 and I know prices will be up at least 10% from here. I need to sell my house first and get the divorce out of the way.

smartay – Member

when we started out on the housing market, my parents and the”older” guys I worked with at the time said as a rule of thumb one weeks wages should cover your mortgage, the rest of the month spread over other bills and spends, i have always maintained this philosophy

Depends if that’s pre or post take

If after tax, then my mortgage would have to drop by about 40%

Just moved within Reigate in the last month, did fairly well on ours because someone wanted to escape London and paid London prices. Reigate still seems high though, good schools, proximity to London and ‘very little stock’ I was told by agents.