House Prices

I saw this today and I wondered if anyone had any comments about it: - http://www.bbc.co.uk/news/business-14526324
It seems that sellers are deliberately over-pricing their homes by huge margins but I don't really see the reason behind that strategy at all.
Surely if you want to sell your home then you set a fair price that you would like to get for that property - or there's no point in advertising it in the first place?!
Is this another case of agents "boosting" prices in the hope of creating an attractive market for those buying to let - profiteering again?
It amazes me really that even now on property programmes they soon drop the pretence of checking-out houses as homes and start out on the investment dialogues; how much rent you can charge or how much profit you could make.

Anyone buying into the property market these day must be aware by now that housing as an investment vehicle has peaked and, although you can still make a living as a private landlord, it's a far riskier business now.
This whole subject worries me because we are in a home that's too large for us now so we'll be looking at down-sizing in about 4-5 years hopefully but if this trend continues either the market will collapse or prices will go up to silly levels again meaning that although we could theoretically get more for this house, ALL properties will increase which will not only leave thousands of us stuck in homes too big for us but could stifle any new or first-time buyers completely.

I find it ominous and I'm wondering what's behind this.
Is it a result of the yo-yo stock markets now, seeing as the FTSE is back down to it's October 2008 level - or worse? stevmk2

Re: House Prices

Well we put our house on the market last September at the price suggested by the agent and were forced to drop it twice before we found a buyer 8 months later. At the end of the day any house is only worth what someone is prepared to pay for it. Having said that its probably worth pricing it a little high on the basis that people will offer less anyway.

Re: House Prices

I blame the estate agents - they over price homes to make more commission :/

Re: House Prices

Correct! Yes, it IS the Estate Agents Azz - again - who are "boosting" house prices by artificial means.
Will they never learn? stevmk2

Re: House Prices

But if the house does sell at the price the seller gains as well and if it doesn't then the agents lose out as well. Surely seller and agents both stand to gain/lose equally and it is down to the market and the buyers to determine what is a fair price for the property. Its a buyers market at the moment so I don't think any agent would get away with putting a property on the market at an inflated price. All buyers will take their time to look around and the internet makes it easy these days.

Val

Re: House Prices

If only that were true Val. Property prices are manipulated by those with a direct interest in keeping prices high and that's agents and property speculators wanting to maximise profits.
Not that long ago if you went into an estate agents and asked them to sell your house they would have valued it and told you what you could reasonably expect to get for it.
Then came the start of the property boom and they all jumped on the bandwagon and "pushed the envelope", (to innovate, or go beyond commonly accepted boundaries - Estate Agent's term!!) and the result was people were led to believe that they'd get much, much more and so greed took over and everyone believed what they were told.
The truth was that it became a strong seller's market rather than a buyer's market, emulating the stock markets, and that continued for some time until people began to question valuations - and then the money dried up.

My whole point on this thread was to point out that I think that agents are cajoling people into bumping up the asking price for their homes, hoping to boost the market again, especially after the dramatic falls on the stock markets.
If you own property you have something tangible. With stocks and shares you have a piece of paper which is only worth what you can sell it for and if the market collapses it is just a piece of worthless paper. stevmk2

Re: House Prices

Well we will have to agree to differ here because if I had gone ahead with the sale I would have dropped quite a bit from what I paid for the house three and a half years ago so I don't feel that is inflating prices at all quite the opposite. I also feel that my agent did come and value it and when it wasn't selling it was him that suggested reducing the price. Market forces in the curreny economy determines what houses sell for not the estate agents IMO.

Re: House Prices

In your case that's probably quite true Val. This price-boosting is dependent on area, perceived value and the strength of the market in the area but I wouldn't mind betting that, had you agreed to sell at the suggested price, your house would have been snapped up and more than likely bought to rent-out rather than used as a home!
I've have a contact in mortgages; my daughter's partner, and he says that most enquiries they get now are from new or existing buy-to-let applicants! Banks etcetera are not lending to those that want a home!! stevmk2

Re: House Prices

Wrong again I'm afraid. The couple who were going to buy it were retired and had the money in the bank and were certainly going to live in it. Anyway it doesn't really matter now as I am not moving for the foreseeable future.

Re: House Prices

I believe that what estate agents really want in the current climate is just to keep turning houses over - if they achieve a bit of a lower sale price it doesn't make a huge difference to the percentage commission they get, e.g. a house price sticks at £500,00 with a 2% commission, or sells for £450,000 more easily and agent gets 2% the commission (plus other costs, of course). The difference is not critical - to keep house sales moving in the current climate is.
My daughter has bought a house in the last year. No difficulty getting a competitive mortgage from HSBC, as a single parent and with one income and two children. The agent suggested she put in a "silly" offer on the house she wanted and see what the seller came back with. Silly offer wasn't accepted, but with a bit of negotiation everyone was happy - estate agent in particular.