Half of those who moved during the pandemic regret paying too much

Mother of one Lina Slater dreamed of a house with more downstairs space, a garage and a driveway. But she was in no hurry to move.

However, after just one viewing, she and her husband Paul, 42, realized how much they had underestimated the real estate market.

Homes flew off the market and viewings filled with dozens of potential buyers – many willing to go well above the asking price.

Busy: Lucy Stewart and husband James Cissel at her parents’ Berkshire home, where they lived after selling their London flat

Lina, who works in marketing, says, “People were going crazy, especially for houses in our area. We suddenly felt this sense of urgency. We made the decision to go and we just had to jump.”

The Hertfordshire couple made an offer on one house – which Lina admits had some work to do – for £7,000 above the asking price.

But they were outbid at the eleventh hour by a buyer who offered £30,000 more.

They eventually found a four bedroom property which they bought for £10,000 above the asking price. But now Lina, 41, is wondering if they did the right thing. And she’s not alone.

Research from Aviva last week found that nearly a quarter of homebuyers paid more than the asking price during the pandemic — compared to 8 percent in the previous year.

Worryingly, the survey found that half of UK buyers regret the amount they paid.

Nine in ten buyers who agreed to a sale between March 2020 and June 2021 also said they found problems with the home that they had not noticed during viewings.

Rush: Lina Slater fears she's paid too much for her new home

Rush: Lina Slater fears she’s paid too much for her new home

Often, buyers were so afraid of missing out that they rushed into buying after viewing a potential home just once, while others didn’t come at all, relying on virtual viewings or photos.

Sarah Applegate, head of risk and insights at Aviva, said: “Home buyers feel the pressure to buy quickly. Our research shows that many people make offers after just a few minutes of viewing, and many discover problems only after they move.’

Lina has personally visited her new home and is happy with her choice. But she regrets making the decision in such a tight time frame.

She says: ‘I saw a house for sale opposite my sister’s, who lives nearby, and the sellers accepted the first offer, which was below the asking price. It was a nice house and someone got such a good deal I had to think twice about it.

“I don’t regret the house we bought, but I wasn’t happy with the prices on the market.”

Despite their haste, Lina and Paul risk losing their savings if they don’t complete their sale before the end of September.

Stamp duty, which meant buyers paid no tax on the first £500,000 of their property price, is currently being phased out.

From July 1, buyers will pay no tax on the first £250,000, and from October the threshold will return to the previous level of £125,000 (or £300,000 for new buyers). Lina says: ‘If we’re not ready by October, we want to pay £22,000 in stamp duty.

In total it will cost us £30,000 to move and now I wonder if we went at the right time. The moving costs are getting out of hand.’

Real estate: Research from Aviva last week found nearly a quarter of home buyers paid the asking price during the pandemic

Real estate: Research from Aviva last week found nearly a quarter of home buyers paid the asking price during the pandemic

This comes as no surprise to Simon Bath, who founded real estate concierge platform Moveable. His data shows that during the pandemic, 13 percent of movers had no budget for additional costs, such as transfer, land registry and removal van fees.

Mr Bath says: ‘Savings on stamps became foolish gold during the pandemic. We constantly saw buyers paying so much above the asking price that any savings they had made were negated.

“What we found is that people were rushing to move and hadn’t considered all the extra costs that came with it.

“All the transfer backlogs have fueled bad practice, with some lawyers charging fees while claiming to speed up the process for anxious buyers.”

The pressure to buy quickly was too much for Lucy Stewart, 31, and husband James Cissel, 38.

The couple had sold their flat in London and lived with Lucy’s parents in Berkshire.

She says, “We thought we were dream buyers. But when we started looking, we realized that wasn’t the case.

‘We saw one house that attracted 50 viewings. We made bids on houses that we knew weren’t right and came close to making some really big mistakes.”

The couple did make an offer on a house in South Oxfordshire, but the seller pulled out at the last minute.

Lucy says: ‘We rushed – the house wasn’t right for us, but we felt the pressure to act.

‘We’ve finally found a house. I’m glad we took the time and that the offers on previous properties didn’t go through.’

There’s also the fear that panic buyers who have paid the asking price for their home are at risk of going into negative equity – where their mortgage debt exceeds the value of the property.

But Lawrence Bowles, a research analyst at real estate agency Savills, says, “In the vast majority of cases, mortgage lenders will have provided a safety net and checked that a buyer isn’t paying way too much for a home.”

However, Jo Thornhill, money expert at MoneySuperMarket, still urges caution.

She says, “For most people, buying a home will be the biggest expense of their lives, so it’s important that they don’t feel pressured into making a hasty purchase.”


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