UK House Price Challenge

With the latest news that house price decline in the UK has hit double digit numbers, and that the decline is even more rapid than at any point in living memory. We are following through with a suggestion we made some time ago … if house prices are bound to fall at least 30 percent then offer 30 percent less.

Some of our readers declared that they were terrified at the concept of offering that much less for a property they wanted. Well, in the near term the answer is, unless you do, you’re going to lose money .. a lot of money.

An approach suggested by some other readers is to beat the estate agents at their own game. Simply, you get some of your friends to sign up with the same estate agents as yourself and they put in the offers at a lower value than you intend to. In recent weeks many estate agents are so short of orders going through the books that they themselves become your best friends prompting the seller to accept much lower (quote – ‘realistic’) offers.

There have been anecdotal reports that this is happening in some parts of London where small groups of city workers have clubbed together to drive prices down to more realistic affordable levels.

It’s clear that such action would be illegal if applied to the stock market or commodity supplies as these cartels often form to attempt to distort markets. However, the housing market is a highly unregulated environment and anyone who has sold or bought a house in the past will be only too familiar with estate agents tactics of ‘talking up’ markets. Clearly it’s now the turn of the buyer to name a price.

As ever our advice is to look at the peak value of properties in the area (October 2007) and offer no more than 70 percent of that value if you wan to be sure of a reasonable starting point for a house – of course you should then barter down.