Sunday, October 14, 2007

Gazundering is here.

Held to ransom

What do a £700,000 flat in Mayfair, a £3m townhouse in Notting Hill and a similarly priced house in the country have in common? All are prime properties that have seen more than 10% price growth this year, but whose owners have recently fallen victim to the rather nasty practice of gazundering.

Posted by garyb @ 06:12 PM (1425 views)
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12 thoughts on “Gazundering is here.

  • ” bid “substantially over” the £3m guide price to secure it. But the mood had changed sharply by the end of last month, when the time came to exchange. The day before, the bidder knocked more than £100,000 off his offer. After some serious negotiation, a deal was struck � but at 3% below the previously agreed price. ”

    3% off the £3M price tag is 900,000. I don’t understand how the buyer can drop his offer by 100,000 and then instead of accepting the new offer the seller then (seriously negotiates!!) the discount to 9 times that value or more.

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  • i dont think 3% of 3M is 900,000, more like 300,000!

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  • What happened to the tales of woe from buyers in London who just couldn’t see an end to the price rises? What about the city boys and foreigners pushing up London prices? What about immigration, lack of housing?

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  • Actially 3% of 3mil is 90,000 so the seller managed to “claw back” 10 grand. I weep for the poor seller who had to sell his home for a measley 2.91 million (which he no doubt bought for under a mil a few years ago) But not as much as I weep for the poor sap who bought it A HAHAHAHAHAHAHA

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  • Inbreda. I make 3% of £3M = 90,000. But then, I’ve never been great at maths!

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  • Had a chat with a chartered surveyor friend this afternoon – yes, he confirms that gazundering is now widespread and that negative equity is beginning to hit the BTL market. HPC underway.

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  • David Smith's Sub Prime. . . says:

    “It is the first example I’ve seen, but I’m expecting a lot more of it.”

    Well errrrm yessss, its called HPC!

    “Buyers must also be aware that if they start to play games at the last minute, this could backfire. I have known a number of sellers who have taken a dim view of this and withdrawn on principle.”

    Ha ha ha ha …. Yes of course…. in your dreams….

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  • Are rightmoves figures for October +2.7%??? What happened?

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  • @pecker.
    I wonder if the sales of all these mega-expensive properties are skewing the figures. We’ve been told less properties have come on the market and buyers are less willing to buy. So if fewer lower or average-priced properties are up for sale, but there are quite a few mega properties up for sale – wouldn’t that skew the figures upwards? Just a thought!
    (The presence of so many engineers on this site is making me doubt my own inferior logic.)

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  • Su, I don’t know enough to comment on your logic, but I agree with your maths…

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  • cornishman.
    My maths WAS right then? Oh, thank goodness for that! So much of the maths on this site is over my head, I start thinking I’m really thick!

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  • Rightmove is tracking asking prices. It does not really represent anything other than seller optimism. If people are trying to sell a property now, rather than sell it during the oncoming down turn, without realising prices may have peaked; the result is that sellers are coming to the table with too high a price for current market conditions.

    On a side note on the mathematics,
    Rightmove’s index is up 2.7%
    Gazundering is apparently knocking 3% off asking prices.

    102.7 * 97 / 100 = 99.6%

    So if the figures were actually a fair refection right now, selling prices should really be 0.4% down on last month’s average house price.

    In reality the problem is more complicated, with optimistic sellers coming to the market, and a more savvy buyer base pushing actual prices down. This leads to short term divergence of right move from other indicies, such as the land registry figures.

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