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‘Reality Gap’ In Property Prices Drives Buyers From The Market

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Bears, your food is ready........ :D

‘Reality gap’ in property prices drives buyers from the market

A spectacular “reality gap” has opened up in London between asking prices in estate agent windows and what buyers are prepared to pay, research reveals today.

The difference has increased more than tenfold since 2003, leaving many buyers frustrated by prices that are often little below or even above their boom-time highs.

In 2003 the gap between average asking prices in London and average sale prices stood at £6,574, or about three per cent. But by this year it had exploded to more than £79,000 or 24 per cent.

http://www.thisislondon.co.uk/money/article-23898762-reality-gap-in-property-prices-drives-buyers-from-the-market.do

Oh, and that's not all....

Britain falls another £10.3bn into the red despite rise in tax take

http://www.dailymail.co.uk/news/article-1330802/Britain-falls-10-3bn-red-despite-rise-tax-take.html#ixzz15dHVCRzH

Edited by Darkman

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In 2003 the gap between average asking prices in London and average sale prices stood at £6,574, or about three per cent. But by this year it had exploded to more than £79,000 or 24 per cent.

Reality gap? More like a reality canyon.

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In 2003 the gap between average asking prices in London and average sale prices stood at £6,574, or about three per cent. But by this year it had exploded to more than £79,000 or 24 per cent.

I've not been able to find details of the original research, which (according to the article) compares Rightmove asking prices with LR sales prices.

But I strongly suspect that it's not been carried out on a house-by-house basis; instead I think someone's just said: Overall average London asking price on RM is 400k, overall average London LR sold price is, 320k so the gap is 79k.

Fine, but that gap could, for instance, simply mean that only cheaper houses are selling, and that they are selling for 100% of asking price.

So, as usual, we can't conclude anything without more information on the methodology.

:angry:

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Maybe sellers are being deluded by "What's your house worth?" type of web site.

For example, I found a property yesterday, in Tadworth, Surrey, which was bought in September of last year for £250,000 and is now "valued" by Zoopla at £322,000! An increase of some 29%! I don't think so, but if the web site says so, why should a seller argue.

Anyone else have examples of similar (apparent) over valuations by such sites as against AEs?

(I did try to raise this a s a separate thread, but, for whatever reason, it was not accepted.)

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Yes, buyers need to understand that sellers will not sell cheap. There is no need to reduce the price. It's just a seasonal blip :lol: It will all be alright when VAT rises and jobs start to disappear in January, prices will SOAR again. Sellers just need to hang on in there.

A royal wedding is all that is needed; if only one could be engineered ...

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Maybe sellers are being deluded by "What's your house worth?" type of web site.

For example, I found a property yesterday, in Tadworth, Surrey, which was bought in September of last year for £250,000 and is now "valued" by Zoopla at £322,000! An increase of some 29%! I don't think so, but if the web site says so, why should a seller argue.

Anyone else have examples of similar (apparent) over valuations by such sites as against AEs?

(I did try to raise this a s a separate thread, but, for whatever reason, it was not accepted.)

That zoopla index is totally flawed, it was clearly build around a rising market and attempted to be flogged to mortgage companies for a quick valuation. There is not enough sales volume in a single area to be able to value it appropriately using their method.

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Kind of similar to what i said in my Psycholgy thread.

If i see overly fanciful prices i just wont bother looking...early 2009 maybe i should have...some when massively under asking.

Maybe i should be bold and put offers on some ludicrously overpriced homes - i only need be sucessful once.

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I live in London. Here's my observation (even at the higher end of the market). People are getting very nervous.

When we first moved here in 2007, there were NO for sale signs in the Maida Vale/ St. John's Wood area (unsightly you know ;) ). Now I see them fairly often, and this is on properties of over 2 million.

In the building I live in, 2 flats were on the market for over 8 months, neither sold. (Of course I think they were asking too much). Anyway the owner (he owned both properties) took them off the market and rented them out instead.

Something is happening, and its going to affect every aspect of the housing market.

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Great article. 'just forwarded it on to friends and family. It's important that people realise this sort of stuff is going on. There are mugs out there who believe that 5% off is a bargain, and that's what the sellers are all holding out for. People should seek independent valuations and make comparisons based on sq ft etc. - and then offer 30% off the proper valuation. :D

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Great article. 'just forwarded it on to friends and family. It's important that people realise this sort of stuff is going on. There are mugs out there who believe that 5% off is a bargain, and that's what the sellers are all holding out for. People should seek independent valuations and make comparisons based on sq ft etc. - and then offer 30% off the proper valuation. :D

I nearly read that as 30% of the proper valuation. Bit cheeky, I thought....but, maybe :D

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Foxtons are the worst at overvaluing to get business, and I suspect they skew the stats somewhat.

This place is near me (http://www.rightmove.co.uk/property-for-sale/property-17270241.html) and is on at £1.4M, which they haven't got a hope in hell of getting.

The kitchen/dining room is actually a converted shop - it used to be Compton Wool & Baby Wear - street view during conversion.

They think a few new flashy fixtures suddenly puts in it the banker's bracket. Nonsense.

Foxtons are scum.

edit: PS. It's also directly opposite a council estate!! see here. Nice view.

Edited by Constable

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Great article. 'just forwarded it on to friends and family. It's important that people realise this sort of stuff is going on. There are mugs out there who believe that 5% off is a bargain, and that's what the sellers are all holding out for. People should seek independent valuations and make comparisons based on sq ft etc. - and then offer 30% off the proper valuation. :D

Nope. I actually think you go in and say - "OK, I'll give you 40% of what you're asking, tops. It ain't worth a dime more".

DO THIS, EVERYONE.

Edited by eric pebble

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Nope. I actually think you go in and say - "OK, I'll give you 40% of what you're asking, tops. It ain't worth a dime more".

DO THIS, EVERYONE.

It would be even better if every potential buyer refused to make a single offer for 12 months and then became very aggressive with the offers that they made. A plague is always more difficult after a drought.

While not as extreme, that is esentially how the collapse in the US started including places where they aren't making any more land like central San Francisco, Beverley Hills and Bel Air, Boca Raton and South Beach as well as on a crowded little island called Manhattan.

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It would be even better if every potential buyer refused to make a single offer for 12 months...

Exactly. The quickest way to cure the housing market is to lose interest in it. While ever it's on the agenda there is potential for people to second guess its volatility.

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Exactly. The quickest way to cure the housing market is to lose interest in it. While ever it's on the agenda there is potential for people to second guess its volatility.

Great if you live somewhere you're happy to live.

Not so good if you don't :angry:

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Great if you live somewhere you're happy to live.

Not so good if you don't :angry:

True. Of course - that's EXACTLY what the VI's want - to get you by the balls - exploit your plight to the max and screw money out of you until your pips squeak. It really is - and always has been - all about who blinks first.

The Moneylenders have been playing this game for generations.

Fine - but when they engineer the Greatest Fraud of ALL Time - MORTGAGE FRAUD/PREDATORY LIAR LOANS - and use them and us to artificially pump up the market as they have for the last 10+ years - ....well - it's led to a financial catastrophe which is still unwinding now.

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Foxtons are the worst at overvaluing to get business, and I suspect they skew the stats somewhat.

This place is near me (http://www.rightmove.co.uk/property-for-sale/property-17270241.html) and is on at £1.4M, which they haven't got a hope in hell of getting.

The kitchen/dining room is actually a converted shop - it used to be Compton Wool & Baby Wear - street view during conversion.

They think a few new flashy fixtures suddenly puts in it the banker's bracket. Nonsense.

Foxtons are scum.

edit: PS. It's also directly opposite a council estate!! see here. Nice view.

preposterous.

even in islington you can get something entirely decent for £1.5m.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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