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Oddjob

Are These Discounts Real?

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Hi all,

We are considering moving out of Cambridge to rural Suffolk.

I was doing some research on house prices and values and found some numbers which are surprising. I’d appreciate your views.

Price rises

Since 2000, selling prices have risen by 75%. Source, home.co.uk,

The house we are considering buying was last sold in 2000 for around 145k.

Apply this price rise and you get to around 250k

Selling/asking prices

This is really surprising. Over the last 6 months, for IP19, the average selling price was 68% of the asking price.

The asking price of the house is 365k. So when you take 68% of this you get to……250k. again source is home.co.uk

So my question is, are these asking prices just one big game by the estate agents, and the market value is really around 2/3rds of the asking price? Living in Cambridge, houses go at a bit of a discount, but not much (5-10%) so this figure for suffolk seems low.

So really, is everyone in a state of denial, and the asking prices are just artificially high, and you'd be a mug to offer much more than 2/3rds of the asking price...?

Cheers

Shane

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Hi all,

We are considering moving out of Cambridge to rural Suffolk.

I was doing some research on house prices and values and found some numbers which are surprising. I’d appreciate your views.

Price rises

Since 2000, selling prices have risen by 75%. Source, home.co.uk,

The house we are considering buying was last sold in 2000 for around 145k.

Apply this price rise and you get to around 250k

Selling/asking prices

This is really surprising. Over the last 6 months, for IP19, the average selling price was 68% of the asking price.

The asking price of the house is 365k. So when you take 68% of this you get to……250k. again source is home.co.uk

So my question is, are these asking prices just one big game by the estate agents, and the market value is really around 2/3rds of the asking price? Living in Cambridge, houses go at a bit of a discount, but not much (5-10%) so this figure for suffolk seems low.

So really, is everyone in a state of denial, and the asking prices are just artificially high, and you'd be a mug to offer much more than 2/3rds of the asking price...?

Cheers

Shane

I suspect that 68% figure is either inaccurate or based on a very small sample. I live not far from that area on Norfolk/Suffolk borders where the market is broadly similar.

Things move slower in rural Suffolk, but 5-10% discount off the most recent asking price is typical for standard houses, unless you come across a forced sale that just won't shift then maybe up to 20-25% is possible. Check out the sold prices on Rightmove...http://www.rightmove.co.uk/house-prices/detail.html?country=england&locationIdentifier=OUTCODE^1177&searchLocation=IP19

I got 20% off a reduced asking price (33% off the original asking price) 2 years ago on a place that needed improvement, was a forced bereavement sale and had been on the market over 6 months. They rejected the offer initially to see if we would increase, then came back about a week later once they realised we weren't bluffing. The market doesn't seem any healthier now, but be prepared for all sorts of EA shenanigans to get you to pay more than you want, they are working for the vendors.

Things have stuck over the winter and lots of reductions appeared, quite a bit of the cheapest stock has gone SSTC in this Spring bounce, but plenty more is coming on at kite-flying prices to replace it. Stock is at record levels, so bar a few lucky sales, these won't get sold, unless they are reduced.

If you're after a character cottage in the middle of nowhere that needs a lot of expensive work, like re-thatching and goodness knows what else, my advice would be to go in low, you can always increase. £250k is plenty to be paying, but unless the owner needs to sell and it appears there's no-one else on the horizon, it might not happen for you. Be firm and polite and stick to your guns to achieve the best deal, but it does depend on how desperate the vendor is and how long it's been languishing.

Check out the Nationwide House Price Calculator and Zoopla which do price extrapolations based on average market data.

Period property (because they aren't making it any more) has performed better than the rest of the market, both in the boom years it rose quicker and since 2007 it's held on better, so the whole-of-market averages may not fully apply. £145k in 2000 probably equates to more than £250k now, but they may have overpaid back then and that's also assuming the present owners haven't done lots of expensive improvement work or extended in any way since they've been there. Nevertheless, that £250k is a real psychological barrier as that's when the 3% Stamp Duty kicks in. In a slow market, everything up to mid-£300s is fair game for a £250k offer, after all it's only worth what someone will pay!

Hope that helps...happy hunting!

Edited by luigi

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Hi Luigi,

Thanks for that.

I did use rightmove for the sold prices for detached, there are about 5 sales per month but the sale price does look its a pretty stable number, at around 250k for the last few months. it has been dropping.

I got the asking prices from home.co.uk, they have been really flat for the last year or so.....

SO unless the data is wrong, there definately is a big reduction in selling prices

Yes lots of thatched about in rural suffolk!

cheers

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Hi Luigi,

Thanks for that.

I did use rightmove for the sold prices for detached, there are about 5 sales per month but the sale price does look its a pretty stable number, at around 250k for the last few months. it has been dropping.

I got the asking prices from home.co.uk, they have been really flat for the last year or so.....

SO unless the data is wrong, there definately is a big reduction in selling prices

Yes lots of thatched about in rural suffolk!

cheers

Ah I see what you did...but comparing the average asking price with the average sale price in an area isn't going to tell you what each house is selling for in relation to it's asking price, all it tells you is how many deluded sellers are kite-flying at the upper end of the market and this Spring seems to have produced a lot of them and there aren't enough buyers around. The houses that sell with greatest frequency are at the lower end of the market, so will pull the average sale price down.

Do get some prices for re-thatching before you leap into that, the typical Suffolk longstraw thatch only lasts 25-30yrs and it can easily be £20-30k for a cottage roof. Re-ridging needs doing after 10-15 yrs and can be a £5-10k job

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Thanks Luigi,

Yes agreed that the method is hardly perfect, but there is not much data out there!

This one we are looking at is thatched, and it does need imminent re-thatching, and we were figuring 30k. Plus the drains are illegal (so thats another 10k) and re-ridging - had not thought about that...hmmmmm

So, in all probavly looking at +50k before a survey!

I hear the seller is sticking to his guns on price. so I think its time to move on from this one. Not enough realism around...

cheers

SHane

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Thanks Luigi,

Yes agreed that the method is hardly perfect, but there is not much data out there!

This one we are looking at is thatched, and it does need imminent re-thatching, and we were figuring 30k. Plus the drains are illegal (so thats another 10k) and re-ridging - had not thought about that...hmmmmm

So, in all probavly looking at +50k before a survey!

I hear the seller is sticking to his guns on price. so I think its time to move on from this one. Not enough realism around...

cheers

SHane

If your doing a complete re-thatch, the ridge gets done at the same time, but then the ridge would need looking at in 10-15 yrs time as that's what deteriorates first.

'The seller is sticking to his guns' is EAspeak for don't give me a lowball offer I can't sell to my client. Remember, he's probably flattered the client about the price that can be achieved to get the instruction. If it's new to the market, the vendor will be full of hope. If it sits around for a few months, that will change, but again, if the vendor doesn't have a compelling reason to sell, he won't.

A lot of potential buyers will be put off by the work needed. Go in low, you can always increase, but be prepared to walk. The problem sometimes occurs that you or a partner falls in love with it, then the EA will be pulling those strings...

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Hi all,

We are considering moving out of Cambridge to rural Suffolk.

I was doing some research on house prices and values and found some numbers which are surprising. I’d appreciate your views.

Price rises

Since 2000, selling prices have risen by 75%. Source, home.co.uk,

The house we are considering buying was last sold in 2000 for around 145k.

Apply this price rise and you get to around 250k

Selling/asking prices

This is really surprising. Over the last 6 months, for IP19, the average selling price was 68% of the asking price.

The asking price of the house is 365k. So when you take 68% of this you get to……250k. again source is home.co.uk

So my question is, are these asking prices just one big game by the estate agents, and the market value is really around 2/3rds of the asking price? Living in Cambridge, houses go at a bit of a discount, but not much (5-10%) so this figure for suffolk seems low.

So really, is everyone in a state of denial, and the asking prices are just artificially high, and you'd be a mug to offer much more than 2/3rds of the asking price...?

Cheers

Shane

You probably already use propertybee, but if not I can highly recommend it. Rather than the figures you have been looking at, it gives you all the history of all properties attempts at selling. Original prices, price drops, sold then back for sale etc. Its like being able to read the mind of the seller. There are ways round it for very savvy sellers but I wont expand on that here !

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