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Surreyprospect

Almost A First Time Buyer.....

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Been quietly watching HPC for a number of months, after I have been looking in Surrey for a property. I thought it good to mention some of my experiences and observations for those considering taking the plunge, in regards to mortgage lenders, estate agents, surveyors, conveyencers and vendors in the very volatile period from October to March.

I had organised an appropriate offset mortgage offer to cover the multiple income of 3, and within the last 6 months, the goalposts have moved TWICE, with the mortgate agents raising the fee % over the base rate, and raising the LTV ratios to qualify for the best interest rates. This has in some cases raised payments by £50 a month (for a £300k property), or set you back an additional 3 - 6 month period, raising the additional deposit required. But nevertheless, I know what I can afford.

The biggest issue at the moment is what is a "fair price" to pay for a house in the last 6 months, and obviously try and negotiate below this point.

Over the six months, I have viewed over 50 places in the flesh, countless properties online so have got a good feel for the area and affordability in regards to "asking price"

Asking Prices

Half the reason for being on HPC is to estimate just how much the market is/can fall. I have had an offer accepted at 8% under the asking price of a very good property in Jan. After the survey, I attempted to take off another 7% due to results of survey (so the survey came in 15% below the asking price and 7% below the offer price).

At 15% off, I would nearly have gone for it, was sensibly affordable, better than other properties on the market, as I wasnt looking short term. But the vendor could only accept 7% as they were in a chain upwards. So the sale fell through. (For reference it is still on the market)

I also put in an offer on another property - 10% below asking price with a comment that if the survey came back lower, I would only complete on the lower price. Again a very good property, prepared again for the long term. But I had to wait 12 days with my offer on the table, and as a result I withdrew it, considering that there was an EA/Vendor potential dutch auction with other buyers. As soon as I withdrew it, surprise surprise, 20 minutes later, it was accepted. But as I said, the offer did not now exist, as I was clearly expecting the survey to come back lower after speaking with the surveyor from the first property. Both were in the same area.

Looking at it, the market where I am looking (M25/M23/A24) within the M25 property is slinking downwards. There is around 5 times the ratio of properties on the market at the moment to what is sold each month (And these do not take into account Flats which the ratio is much higher). There were NO buyers in December, a new years influx of buyers around in Jan, a falling number in Feb, but in March, they are dropping away without the expected rate cut. Evidence of this, is that I can drive into any Surrey town on any given day, and organise to see a property within 30 minutes of walking through their doors, regardless of whether the EA has keys.

I am with over 10 EAs, and have told them all about my expectations and observations of the market.

The downwards push is about 5-10% at the moment, but you have to consider whether 5% of this is obvious inflated EA valuations.

Surveyers in the area are bringing this down another 5-7%. So thats as much as 15% down already.

I am still looking for a place, but only looking for a bargain (20% plus and more if I can shift that issue of Stamp Duty 1% threshold to 3% threshold) which comes back with a comparible survey price to final offer.

So for FTB, check your mortgage offers. Dont compromise by using a mortgage agent tied to an EA, as without a doubt the "survey" will almost come back in line with your "offer". Use an independent full survey and when the price does not match, you would be mad to make the difference up, so wait until prices drop back to below survey levels. And use a conveyencer that will push for a offer reduction after completion of the survey. In the past I am told this rarely happened, due to the fear of gazumping. Well the big fear at the moment is gazundering. And its a dirty, dirty word now for EAs, as many chains are busting down due to results of surveys, leaving a glut of properties in the South East.

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Out of interst whereabouts are your favourite areas?

I am keeping an eye on CR8 and it seems slow - houses still going under offer, reductions (propertybee, last month or so 4 bed detached 350-600k) anywhere up to 5%, but nothing compared to neighbouring areas which seem to be gaining momentum.

Obviously your real-life experiences are more err, real, than stats!

Edited by herbert_goon

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<snip>

Thank you for sharing your experiences and welcome to the forum.

I can't see why, in this market, anyone should offer more than the surveyor comes back with.

This value is for the lender to work out their LTV and I think they are coming to realise that property can go down and want to protect themselves.

Worrying times for homeowners, but looking at the other topics in the main forum, worrying times for anyone with money in the bank as well. :ph34r:

Edited out original post. :)

Edited by bobthe~

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Out of interst whereabouts are your favourite areas?

I am keeping an eye on CR8 and it seems slow - houses still going under offer, reductions (propertybee, last month or so 4 bed detached 350-600k) anywhere up to 5%, but nothing compared to neighbouring areas which seem to be gaining momentum.

Obviously your real-life experiences are more err, real, than stats!

Looked from Epsom all the way through to Whyteleafe. Even looked as far in as Purley.

I am not sure its all going to drop as far as 40% in the area, only because there are plenty of FTB in central london, who have no way of getting on the ladder in the Zone 4 inwards burrows, unless you want a flat resembling a box.

If they are like me and my gf, its time to look to move out into still overpriced Surrey. Prices will drop, as I have seen in 6 months, but to what level?... I am guessing 30% bringing them back to .....2004/05? Still ridiculous prices, but not as bad as the Mickey Mouse levels in 06/07. (apologies to Mickey Mouse)

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Still ridiculous prices, but not as bad as the Mickey Mouse levels in 06/07. (apologies to Mickey Mouse)

Like this place which would have been abuot 450k 2 years ago!

February 2008 - I am waiting on the Bank of England's decision on interest rates which we should hear tomorrow. It's tempting to wait until the end of the week and then attempt to appear smart, that would fool no-one who knows me! All I can say that I would be very worried if the rate dropped by a full half percent. January property figures from The Halifax indicated that in their survey that property prices had been stable that month. January is probably the worst month to use as a pattern or indication for the rest of the year. Recovering from Christmas, many of us have tax to pay, new bills arriving all the time and of course us catching an economic cold after The US of A sub-prime sneeze - they really are in deep trouble. My thoughts over our position are well known and I think February and March will see a change to the local housing market. Energy and food inflation pressures are going to be reflected in the next set of inflation figures. That will hurt.

Interesting statistics for 2007 (according to The Times) -

In 1970, 80% of British primary school children walked to school on their own. Today, less than 9% do.

There were 2.3 million cars on Britain's roads in 1931 and 7,000 deaths in motoring accidents. In 2006 there were 33 million cars on the road and only 3,150 deaths.

Plans are moving ahead for Purley music week, we are looking for anyone wishing to participate - do you belong to a group or choir, are you a church with a hall, a cafe which could accommodate a solo artist? Do you just want to know what is planned and if there might be music you like. Do please use the link below.

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Good post :)

You're at the stage I will be in later in the year, i.e. looking round properties face to face with an EA with ever intention to buy, but not if it means being mugged by the vendor.

Those selling will realise eventually they need to accept lower offers

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Thank you for your very informative post. We have also been looking at Surrey and searched in 2006/7 for somewhere to buy that was not a shoebox, had gas cooking/central heating and some outside space.

We missed the inital "white flight" from London but we still competing with people who had sold their London flats and wanted a countryside home now. The other people we were competing with with the BTL brigade.

I wonder how many FTB there are still left in London who will still move out into the country now? If prices drop in London many of our friends (of those who are still here) will stay and get somewhere "livable". Would be interested to hear others experiences.

Too many people have left London and face huge mortgages and a difficult commute in Surrey.

There was nothing available for us when we looked 2006/07. All the properties available, that we could afford, meant a much lower standard of living than the London flat we currently rent. The asking prices easily rose 30% in the time we looked and we snapped up quickly. The quality in our price range (to to 350,000) was very low in Surrey. We looked in quite a few areas and were prices out as we looked.

I'm also in a slightly strange position of being disabled and needing to live in a flat or somewhere with flat access. At a pinch I could live in a cottage/house but with a stairlift installed. That means a lot of places are out for me.

Now I am seeing places on the market that are coming into our price range and staying on the market. It seems that the very cheap ones in Surrey (under 300,000) are being sold but not those in our price range or above until it reaches the very expensive range.

Then again it's too early to tell as these relative "cheapies" may come back on the market as surveys /mortgage offers fall through.

I am really concerned about buying a flat. These seem to be particularly sensitive to the current market changes. There are many more Surrey flats coming onto the market in our price range. They are also sticking, not selling and in some cases suffering cuts in the asking price. I shudder to think what the valuations will be.

What concerns me about buying a Surrey flat is being stuck in a BTL dream turned sour. In a couple of developments I saw multiple flats were for sale and there were signs that the upkeep of the communal parts was being neglected. Also flats being reposessed.

Anyway, would love to hear how you get on.

Edited by Flopsy

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Good post :)

You're at the stage I will be in later in the year, i.e. looking round properties face to face with an EA with ever intention to buy, but not if it means being mugged by the vendor.

Those selling will realise eventually they need to accept lower offers

You would be surprised how many of the EA sales people I speak to do not really realise what is going on around them. But I have had a few debates with the Managers of the agents, simply stating I want to pay the lower of what I think its worth and what the bank/surveyor thinks its worth. Both of these are below what the EA and the Vendor think its worth.

Some EAs are slowly coming around. Others just see myself as a bit of a pain in the backside wanting lower prices. One even said to me after I took the offer off the table (on for 12 days), that the vendor was not sure whether to accept it, as they were buying a place as well, and its not like "buying a pair of shoes".

Ummm, interesting comment... :blink:

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hi surreyprospect

i'm also looking to buy in surrey (rh4). looks like a good 6 months supply on the market at the moment (rightmove vs land reg).

all priced for the last greater fool, very few have gone under offer this year.

reminds me of 1988-1989 in london. people kept trying to sell at 88 prices for a good 6 months before the penny dropped. after that, prices had to drop 20%+ in order to do a deal.

this is the phoney war, blitzkrieg just around the corner.

good luck.

+ once the agents get desperate (ie/ go bust or sell at the new reality), they'll welcome any offer.

Edited by STR2007

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You would be surprised how many of the EA sales people I speak to do not really realise what is going on around them. But I have had a few debates with the Managers of the agents, simply stating I want to pay the lower of what I think its worth and what the bank/surveyor thinks its worth. Both of these are below what the EA and the Vendor think its worth.

Some EAs are slowly coming around. Others just see myself as a bit of a pain in the backside wanting lower prices. One even said to me after I took the offer off the table (on for 12 days), that the vendor was not sure whether to accept it, as they were buying a place as well, and its not like "buying a pair of shoes".

Ummm, interesting comment... :blink:

Who on earth takes 12 days to chew over the fat, you either sell it or not, unless the vendor / EA is playing silly buggers and trying to make you sweat. They have already taken the decision to sell, hence why its on the market. It takes 30 mins to check over figures to see if this offer makes it viable for them to sell or not.

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Who on earth takes 12 days to chew over the fat, you either sell it or not, unless the vendor / EA is playing silly buggers and trying to make you sweat. They have already taken the decision to sell, hence why its on the market. It takes 30 mins to check over figures to see if this offer makes it viable for them to sell or not.

Agents and sellers can take as long as they want and decide to take which ever offer they want. Recently had an offer rejected. Developer is going to get it instead. Ah well. He obviously knows what he can afford to offer and make money on it.

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Agents and sellers can take as long as they want and decide to take which ever offer they want. Recently had an offer rejected. Developer is going to get it instead. Ah well. He obviously knows what he can afford to offer and make money on it.

I know that, but in my view its bad form waiting 12 days to decline or accept someone's offer.

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I know that, but in my view its bad form waiting 12 days to decline or accept someone's offer.

It is. But I assume that's 12 days including weekends and someone can quite easily decide to have a week away whilst selling their house.

It took about 4 days for them to find out for me if it was freehold or not - that was including the solicitor having a day off and the weekend... And no HIP available to look it up on either! :)

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Just a quick update on this.

Both properties I was interested in have both had offers accepted after mine were withdrawn and not accepted after survey reductions.

The subsequent offers accepted have both fallen through as well for exactly the same reasons I had suggested in Jan.

Both properties have reduced asking prices (1.5% and 3% respectively - still way over what the survey valuations are coming back with). And the number of properties now on the market in the catchment area I was looking have increased by 11% across the last 3 weeks. About 30% of the places I have looked at have reduced asking prices. Very very few completions. Some properties on the market for 250 days, which I seriously looked at 6 months ago, but are still waiting for the elusive buyer who does not read the news, to pay the inflated asking price, which is probably needed to get sellers out of a spot of real bother...

I will stick fat, and watch the inevitable drop. The Nationwide news last week pulling some FTB mortgages and upping rates have knocked the number of buyers looking down considerably. I am getting loads of potential properties sent to me as soon as they come, even before they hit the sites. I have not looked at a property for 3 weeks now. Suggest plenty of others do the same. Still plenty of overpriced houses, multiplying each week. Have not even bothered to look at flats, as there are loads and loads not shifting.

Expect some decent drops (10% to 15%) in the next 3 months, not as low as they will go, but might be enough to actually see a few completions.

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Thank you SP, for the update.

We have not viewed any properties since December but I've been following the market from home.

This flat first came on the market last year at £385,000. It then went down to £375,000 with one agent and £350,000 with another. Then it went "under offer" with Hamptons at £350,000.

It was sent to me last night as a new listing for £359,000. Hamptons still have it at "under offer" so I presume they are still holding some hope or have lost the sale and lost the listing.

http://*******.com/2j3pug

or

http://www.findaproperty.com/displayprop.a...p;agentid=00866

I need to buy a flat as I need wheelchair access (either that or put a chairlift in a cottage)

Sounds like interesting times ahead....

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  • 297 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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