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Bingley Bloke

Why Bother Reducing Your Asking Price By 1.5%?

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A while ago a flat near me went up for sale at £135K. It has just been reduced, by 1.5%, to £132,995. Surely if someone was willing to pay £132,995 they'd have offered this when the flat was on at £135K. Unless you're going to reduce an asking price by an amount that attracts a whole load of people who instantly disregarded the property at the old price, then why bother reducing it at all?

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I'm seeing this phenomenon all around where I live. One local EA is advertising this week a 'Summer Sale' where they filled a couple of pages in the local rag with reduced properties. An interesting spin to put on it, don't you think? Others are more discreetly listing their reductions.

Meanwhile, I know a few people who want to move. All of them have had their properties on the market for several months with no sign of movement.

It's not much, but it's a start.

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It's not much, but it's a start.

The funny thing is, around my area loads of places have had as much as 10% slashed off, which you can understand might make a difference, and even they aren't shifting. In fact, the only house that did suddenly go 'Sold STC' after a reduction, do so after 20% was knocked off. There's just no logic in knocking 1.5% off, it's so close to the original price that it's irrelevant. The same mentality seems to extend to cars too... I recently had a mailing from my local BMW main dealer telling my I could have £800 off a new M5. I can't remember exactly what a new M5 costs, but I believe ity's in excess of £70K, so why difference does £800 make? None.

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The funny thing is, around my area loads of places have had as much as 10% slashed off, which you can understand might make a difference, and even they aren't shifting. In fact, the only house that did suddenly go 'Sold STC' after a reduction, do so after 20% was knocked off. There's just no logic in knocking 1.5% off, it's so close to the original price that it's irrelevant. The same mentality seems to extend to cars too... I recently had a mailing from my local BMW main dealer telling my I could have £800 off a new M5. I can't remember exactly what a new M5 costs, but I believe ity's in excess of £70K, so why difference does £800 make? None.

How are rents currently doing in Bingley?

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A more pertinent question is"How many properties are taken off the market because the asking is not met?"

I may be wrong but I feel it my waters that we will witness a severe correction in house prices soon.

Vive La revolution!

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How are rents currently doing in Bingley?

Well there was an apartment up for sale at £175K, and up for rent at £625/month, a short while ago. My calculations indicated that you'd need to charge £820/month rent on a £175K property for it to be worthwhile, so I guess rents are doing quite badly relative to asking prices for sales. I suspect rents are a good indicator of what prices should really be. Those renting are those who can't afford to buy so landlords can only charge rents that these people can afford or risk experiencing lengthy voids. Of course, if you bought one of these apartments at the bottom when they were about £90K then you can charge an affordable rent and still get a decent return, but those buying to let at today's prices aren't going to get anything like the return they need. It is for this reason that I can't understand why peoiple are still eager to BTL. Surely being investors, rather than someone looking for a home, their calculations would indicate that it isn't a worthwhile venture.

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A more pertinent question is"How many properties are taken off the market because the asking is not met?"

I may be wrong but I feel it my waters that we will witness a severe correction in house prices soon.

Vive La revolution!

I agree. I'm buying but fully expect to be in negative equity in 12months - it's just that my current housing situation is so desperate on a rough council estate that when I was offered a interest free homebuy loan I just had to takle it. Houses & flats I was looking at upto 180k just 2weeks ago have had 5-6k knocked off, one flat was reduced 10k. Unfortunately I was only able to haggle about 1.5% of asking on the one I settled for as it had only been on the market 2days and I was the first to view! I had a tight timescale in order to qualify for the loan.

Edited by kman

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I agree. I'm buying but fully expect to be in negative equity in 12months - it's just that my current housing situation is so desperate on a rough council estate that when I was offered a interest free homebuy loan I just had to takle it. Houses & flats I was looking at upto 180k just 2weeks ago have had 5-6k knocked off, one flat was reduced 10k. Unfortunately I was only able to haggle about 1.5% of asking on the one I settled for as it had only been on the market 2days and I was the first to view! I had a tight timescale in order to qualify for the loan.

:unsure::o:ph34r::huh::blink:

Edited by Buffer Bear

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A while ago a flat near me went up for sale at £135K. It has just been reduced, by 1.5%, to £132,995. Surely if someone was willing to pay £132,995 they'd have offered this when the flat was on at £135K. Unless you're going to reduce an asking price by an amount that attracts a whole load of people who instantly disregarded the property at the old price, then why bother reducing it at all?

Most people on here would be quite literally ecstatic to see a MoM or YoY 1.5% fall in prices!

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Most people on here would be quite literally ecstatic to see a MoM or YoY 1.5% fall in prices!

Old news in my town I'm afraid.

Why would anyone be ecstatic at such pitiful falls? Many more where they came from...

;)

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Why would anyone be ecstatic at such pitiful falls?

I wouldn't call 1.5% per month 'pitiful': that's 18% a year, or about 3k a month... far more than most people earn.

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I wouldn't call 1.5% per month 'pitiful': that's 18% a year, or about 3k a month... far more than most people earn.

If it's MOM over a 12 month period - you're quite right. If it's a one off, then yes it is pitiful considering the ridiculous bubbl we are in now.

But as I said... Plenty more to come ;)

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Old news in my town I'm afraid.

Why would anyone be ecstatic at such pitiful falls? Many more where they came from...

;)

We have some YoY negative near where I live:

Flats

Warwick

£148,314 Q: -3.4% YoY: -11.1% 158

Stratford-On-Avon

£136,572 Q: -7.9% YoY: -3.6% 69

Sources:

England and Wales

Land Registry of England and Wales. The information above is based on figures provided by the Land Registry of England and Wales.

Figures for England and Wales are for the period April to June 2006.

:)

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A more pertinent question is"How many properties are taken off the market because the asking is not met?"

I may be wrong but I feel it my waters that we will witness a severe correction in house prices soon.

Vive La revolution!

After a bad start to the year I would say it is back 2005 in Scotlandshire. For sale signs hanging about for months, lots more houses for sale. For a moment there I was a bit worried about having made the wrong decision. Woohoo.

I don't care about a crash. I just cant be bothered with a bidding war. Learned my lesson from ebay. I am staggered by the number of people who will pay way more than the new price for second hand stuff.

Explains a lot about the housing market if you ask me.

Edited by gordonbrown

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Learned my lesson from ebay. I am staggered by the number of people who will pay way more than the new price for second hand stuff.

Yeah, I only just started buying stuff off ebay and I noticed that myself: it's bizarre to see people buying second-hand DVDs for more than they'd pay to buy them new from Amazon or play.com.

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We have some YoY negative near where I live:

Flats

Warwick

£148,314 Q: -3.4% YoY: -11.1% 158

Stratford-On-Avon

£136,572 Q: -7.9% YoY: -3.6% 69

Sources:

England and Wales

Land Registry of England and Wales. The information above is based on figures provided by the Land Registry of England and Wales.

Figures for England and Wales are for the period April to June 2006.

:)

That's very curious, RB.

For some odd reason, you've selected just Flats for your statistics. I could have sworn that earlier today, when someone accused you of being selective, you insisted that you preferred to regard Detached properties as the benchmark. Here are the figures you really meant to look up:

Stratford-On-Avon £363,981 10.7% -2.6% 197

Warwick £352,420 9.7% 5.7% 192

Detached properties in your town shot up 10.7% in the last 3 months!!

And even if we stick with flats, why on earth didn't you mention North Warwickshire, where the same source you quote with such confidence, informs us that prices rose by more than 21% over the last year!

Face it, you're a devious bullsh1tter. No matter how often you are confronted with the evidence of you fiddling the figures, you keep on doing it.

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Yeah, I only just started buying stuff off ebay and I noticed that myself: it's bizarre to see people buying second-hand DVDs for more than they'd pay to buy them new from Amazon or play.com.

I think thats just the sheep effect, there are plenty of places to buy things either cheaper or with a lot less hassle than ebay, but somebody has told these idiots that ebays really good. They have done no research themselves and are happy to pay over the odds for something.

There is also this general perception that buying stuff at auction is cheap and you get a bargin when in most cases you get into a bidding wart and pay over the odds.

Back to the original question I think this sort of change is so that 1. the EA can tell people it's been reduced (without revealing the original figure) and 2. it puts it into a different price category i.e. the £120,000 - £130,000 the EA can then promote it as "Just over £130,000".

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Only if the agent relists the property. Modifications to existing records do not cause the property to show up in a 'new property' search.

You can chose to be emailed every time a price changes though

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Only if the agent relists the property. Modifications to existing records do not cause the property to show up in a 'new property' search.

Well it did happen for me. My agent relisted it. I have also seen other properties to behave in the same way.

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  • 301 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% +
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      • Even
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