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http://www.zoopla.co.uk/for-sale/details/42051457?search_identifier=c5c7977682157d764e23cac3e80ff953#CReCdf95QkdlmblO.97

I lived not far from here in a nice enough 3 bed 1930's semi which sold for 385,000 last summer - not even extended and the garden needed a fortune spending if you were to landscape it. Looking at the size and standard of this house I'm genuinely surprised it's not sold (look at the reduction history). Yes it's on a main road and needs a dropped kerb but the sheer size of it means a year ago this would have ben snapped up at asking. All the while houses like this aren't selling I see a light at the end of the tunnel...

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R1ch   

Sorry to dampen your hope, but it says "Last sale £327,000 on 29th Mar 2016" on the Zoopla page...

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Venger   

 

5 minutes ago, R1ch said:

Sorry to dampen your hope, but it says "Last sale £327,000 on 29th Mar 2016" on the Zoopla page...

More:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=52105750&sale=69574953&country=england

Above showing archived pre sale pics, before the buyers refurb.

with a link to 'currently on the market' - leading to latest RM listing... not studying in detail but a quick glance though and I see a bathroom match.

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Reality check. That is the best part of four hundred thousand pounds.

Working on the 123 rule quoted elsewhere ( sorry, forget who but it is a great rule), with mortgage interest that is eight hundred thousand pounds which is a before tax income of one point two million pounds.

On the assumption that to be safe your mortgage should never be more than one third of your salary, you need to earn three point six million pounds gross to afford that three bed semi.

So earn one hundred thousand pounds for thirty six years and you could be the proud owner of a three bed semi.

Good job I haven't wasted all my money on an iPhone!

 

 

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Venger   

It's not so much the 3 times a lady rule against these mortgage rates... teaser rate 2 year fixes, or even 5 to 10 year fixes, and SVRs.

Yet the higher buying prices and bigger mortgage, put into sharp focus the amount of debt to be repaid in total, on any sizeable mortgage.

I would far prefer to pay less and borrow less, even against higher rates.

I got this link from Democorruptcy in 2012, and haven't yet found a better mortgage calculator.

https://www.drcalculator.com/mortgage/uk/

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6 hours ago, CunningPlan said:

Reality check. That is the best part of four hundred thousand pounds.

Working on the 123 rule quoted elsewhere ( sorry, forget who but it is a great rule), with mortgage interest that is eight hundred thousand pounds which is a before tax income of one point two million pounds.

On the assumption that to be safe your mortgage should never be more than one third of your salary, you need to earn three point six million pounds gross to afford that three bed semi.

So earn one hundred thousand pounds for thirty six years and you could be the proud owner of a three bed semi.

Good job I haven't wasted all my money on an iPhone!

 

 

Yes.....it only makes sense if HPI continues. That is the assumption built into house "values". You're not buying a cr@ppy semi. You're paying for admission to a pyramid that doubles your stake very 7 years. 

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ASBEAR   

I no more look for a house in Wokingham but keep monitoring the price as a house price trend indicator.

The asking prices for this kind of houses in this area were around 425k or higher early in 2016, and sold very quickly. But it's now listed as 375k. Another positive fact is the EA is Romans who is known as a kite flyer.

http://www.rightmove.co.uk/s6p/58277932

Many of you will say 375k is still insane and I totally agree, but still it gives me hope. 

 

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200p   

I am surprised dropping the Kerb wasn't the first thing done on the refurb. A quick check on the local council website, should give you a fixed price on having it done - usually less than for £2K.

You have to think if you bought it what you could improve on it - a dropped kerb might add £10-30K value depending on scarcity of parking in the area, which reduces your risk if you buy.

£375K sounds a lot for most people in the UK. But you have to calculate your unknown pros in your situation that we on the forum don't know about you. If you earn £85K in the city, your job is reasonably safe and you have a £100K deposit, then that seems a reasonable bet. IF the Trump/Brexit years coming up is the start of a long structural boom then the timing might be right. We won't know for a while though. The mainstream media are terribly pessimistic over Trump/Brexit and for the Contrarian, this might provide an opportunity.

Cheeky offer of £300K?

Edited by 200p

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ASBEAR   
6 hours ago, 200p said:

I am surprised dropping the Kerb wasn't the first thing done on the refurb. A quick check on the local council website, should give you a fixed price on having it done - usually less than for £2K.

You have to think if you bought it what you could improve on it - a dropped kerb might add £10-30K value depending on scarcity of parking in the area, which reduces your risk if you buy.

£375K sounds a lot for most people in the UK. But you have to calculate your unknown pros in your situation that we on the forum don't know about you. If you earn £85K in the city, your job is reasonably safe and you have a £100K deposit, then that seems a reasonable bet. IF the Trump/Brexit years coming up is the start of a long structural boom then the timing might be right. We won't know for a while though. The mainstream media are terribly pessimistic over Trump/Brexit and for the Contrarian, this might provide an opportunity.

Cheeky offer of £300K?

I am not considering buying anything now,  Wokingham was just a candidate location a year ago.  I FEEL prices are going down so I will wait. :rolleyes:

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Tempus   
On 19/03/2017 at 6:53 PM, A third of everything said:

http://www.zoopla.co.uk/for-sale/details/42051457?search_identifier=c5c7977682157d764e23cac3e80ff953#CReCdf95QkdlmblO.97

I lived not far from here in a nice enough 3 bed 1930's semi which sold for 385,000 last summer - not even extended and the garden needed a fortune spending if you were to landscape it. Looking at the size and standard of this house I'm genuinely surprised it's not sold (look at the reduction history). Yes it's on a main road and needs a dropped kerb but the sheer size of it means a year ago this would have ben snapped up at asking. All the while houses like this aren't selling I see a light at the end of the tunnel...

Tiny third bedroom and no upstairs bathroom, only a ground floor wetroom. Without a window. And it looks like the wetroom is accessed via a door in the lounge. So that's a horrible layout for the family you'd expect to want a three bedroom house. Plus it's Hornchurch. And yet they still wanted £400K last November, hoping to bag a £73,000 increase since the March 2016 sale.

London's outer boroughs have rocketed in price since 2013 and most continue to do so. 

There is now no 'cheap' property in London that an average earner might hope to buy using just their salary. I've even posted 1-bed flats in tower blocks in Thamsemead that are asking £200,000. 

To say there is any hope in that picture...

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On ‎20‎/‎03‎/‎2017 at 0:01 AM, CunningPlan said:

Reality check. That is the best part of four hundred thousand pounds.

Working on the 123 rule quoted elsewhere ( sorry, forget who but it is a great rule), with mortgage interest that is eight hundred thousand pounds which is a before tax income of one point two million pounds.

On the assumption that to be safe your mortgage should never be more than one third of your salary, you need to earn three point six million pounds gross to afford that three bed semi.

So earn one hundred thousand pounds for thirty six years and you could be the proud owner of a three bed semi.

Apologies if I'm mistaken but it seems you assume the property is bought by a one income household with zero wealth and 100% mortgage.

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6 minutes ago, Muddlehead said:

Apologies if I'm mistaken but it seems you assume the property is bought by a one income household with zero wealth and 100% mortgage.

To an extent yes. Because that is how it should be.

I see this as a home to start a family in. Therefore, in a decent world, one earner would not be earning for 5-7 years and then maybe part time for another 5.

I will concede on the 100% mortgage - but at this sort of level a 90% mortgage would be the only way it would be affordable to most under 30's without Bomad / HPI profit from ludicrously priced one bed rabbit hutch.

It is very similar to my in-law's house. They bought that with one average salary and stay at home mother until both kids were at school and then part time bank teller job during younger school years.

That is the society we should be looking to get back to.

 

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winkie   

So ask yourself what makes people want to buy where they buy..... is it family and social support connections in a particular area, and or a really decent well paying job with prospects in that area to service the cost of housing living there....or the idea in their mind that they have a good chance of making lots, many thousands of pounds worth of free money while living in it, with the reasoning that someone else will snap it up from them at a greater cost than they paid for it and the spent money decorating and improving it (in their taste) when they decide to sell.....different people, different motivations, remove the last one and housing and the high, growing cost of housing will get back to some sense of normal normality.....better for everyone imo.;) 

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janch   
On 21/03/2017 at 0:39 AM, ASBEAR said:

I no more look for a house in Wokingham but keep monitoring the price as a house price trend indicator.

The asking prices for this kind of houses in this area were around 425k or higher early in 2016, and sold very quickly. But it's now listed as 375k. Another positive fact is the EA is Romans who is known as a kite flyer.

http://www.rightmove.co.uk/s6p/58277932

Many of you will say 375k is still insane and I totally agree, but still it gives me hope. 

 

This is one of the areas I keep an eye on too and I agree prices have "softened".  2 bed terraces were above 300K last year and some are now below this.  I do a weekly count of properties new to the market in the past week which includes reductions.  The amount of property coming on has reduced substantially in the past month or so. If you subtract the doubles (which incudes those annoying reductions for over 60s who get a life-time mortgage) the ratio of new to the market v reductions is now approaching 50% most weeks.  It used to be much less than that which I find heartening.:)

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ebull   

First listed
£417,500 on 27th Oct 2016

Asking price changes
  • £400,000 4.2% Reduced on: 10th Nov 2016
  • £395,000 1.2% Reduced on: 19th Jan 2017
  • £385,000 2.5% Reduced on: 27th Jan 2017
  • £375,000 2.6% Reduced on: 23rd Feb 2017
  • £360,000 4.0% Reduced on: 11th Apr 2017

Page views
Last 30 days: 856  |  Since listed: 2,118
Figures updated once daily

Last sale
£327,000 on 29th Mar 2016

assuming 3% extra payable 17k SDLT = 344k plus trad EA 1% ++ [why aren't they using purple bricks] = 348k. One year finance at 3% = 358k ....

Guessing most of that tasteless low quality crap is new so add the cost of that and this is a flipper? The losses can only mount.

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ebull   

Sorry my bad, the extra 3% SDLT started a few dayys after the last sale date.

Choice of date does suggest they have another property so at least the mortgage provider will have two bites of the cherry to get their money back.

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tyres   
On 3/20/2017 at 0:01 AM, CunningPlan said:

Reality check. That is the best part of four hundred thousand pounds.

Working on the 123 rule quoted elsewhere ( sorry, forget who but it is a great rule),

Can someone post a link to this rule , I couldn't find it using the sites search , thanks

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18 minutes ago, tyres said:

Can someone post a link to this rule , I couldn't find it using the sites search , thanks

Sorry, can't do links from the kindle but the basic premise is that a £100k mortgage, once interest is added, will cost you £200k to pay off which is £300k of pre-tax earnings.

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MattW   
On 20/03/2017 at 1:16 AM, Venger said:

I got this link from Democorruptcy in 2012, and haven't yet found a better mortgage calculator.

https://www.drcalculator.com/mortgage/uk/

Very impressive calculator, thanks Venger. :) I have bookmarked it.

I would be able to borrow £76,000 at a stretch and the total payment on that is £146k @ 5%. :blink:

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Venger   

*Under offer*

 

On 4/15/2017 at 9:45 AM, MattW said:

Very impressive calculator, thanks Venger. :) I have bookmarked it.

I would be able to borrow £76,000 at a stretch and the total payment on that is £146k @ 5%. :blink:

:)

Thanks MattW, but I learned about that site from Democorruptcy.  

Hope you find it useful though.  It's a great mortgage calculator number cruncher which keeps my mind focused, especially against all the posters who tip up claiming mortgage same as rent so a "no-brainer".... to pay £400K for a Manchester semi or whatever.

That's 'focussed' if mortgage rates ever tick up.... when needing to refinance onto a new deal.

So many years of hype that mortgage rates set to rise... then ever lower rates (it seems to me).

Quote

 

Rates are rising already, so act fast to get the best mortgages
By NEIL SIMPSON, FINANCIAL MAIL ON SUNDAY
 
PUBLISHED: 22:01, 24 May 2014 

 

 

Also sad to see that themortgagemeter is no longer online.  @the_duke_of_hazzard  That was such a great resource for looking at different active mortgage rates across a wide range of lenders, and at different LTVs.

I got the Times on Saturday but only quickly glanced at a few pages.  It was only when I began ripping out pages last night - to pad a box  -(to store a 250GB SATA hard-drive I've backed-up family photos onto via a docking station), that I came across this article.

 

Quote

May 13 2017, 12:01am, The Times
Anne Ashworth: Don’t expect lenders’ generosity to last


...There were concerns that memories were short and that bankers would again abandon any sense of restraint.  Thanks to the MMR, such conduct has been rare, a source of grievance among some homebuyers. (Link example added by Venger... : Some renters.. "Gimme the debt to pay what it is worth and outbid others") Lenders could now respond to the housing market slowdown by further curbs, or so it is feared, by enabling those borrowers who didn’t experience the credit crunch the first time to experience the pain.

So how alarmed should the creditworthy be at the prospect of another crunch? It depends. Competition for certain customers is increasing, leading to the lovebombing of those borrowers who qualify for loans of 60 per cent of a property’s value. One broker said: “For this group, there are some really, really low rates.” The range includes HSBC’s 1.69 per cent five-year fixed-rate deal. Even if you are looking for a two-year fixed-rate at 80 per cent loan to value, it is still possible to find a deal under 2 per cent. However, the cost of 95 per cent deals is edging upwards, as our best buy tables show, so consider acting now if this what you need.

----

My archived notes from elsewhere... but not much of a comfort against years of more HPI+++ power away, although at least BTLers have doubled down into Section 24.

Quote

 

It's a terrible time to buy when interest rates are low, like now. House prices rose as interest rates fell, and house prices will fall if interest rates rise without a strong increase in jobs, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down.

It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

A low price lets you pay it all off instead of being a debt-slave for the rest of your life.

As interest rates fall, real estate prices generally rise.

Paying a high price now may trap you "under water", meaning you'll have a mortgage debt larger than the value of the house. Then you will not be able to refinance because then you'll have no equity, and will not be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage

You can refinance when you buy at a higher interest rate and rates fall, but current buyers will never be able to refinance for a lower interest rate in the future. Rates are already as low as they can go.

-Patrick Killelea

 

FT Affordability Backwards.  (h/t @spyguy for bringing that to my attention)

Quote

Why do the buy side idiots fall
for the FALSE CHOICE FALLACY????

Choice 1: Buy today, right now, this second.

Choice 2: Rent until you die.

Um, I will take door #3: let prices fall a couple of hundred 
thousand pounds on a home like this, and buy it in a year or two.

 

Quote

Interest never sleeps nor sickens nor dies it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you. -- J. Reuben Clark

‘Interest on debt grows without rain’ – Yiddish proverb

 

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Venger   
On 3/20/2017 at 0:01 AM, CunningPlan said:

Reality check. That is the best part of four hundred thousand pounds.

Working on the 123 rule quoted elsewhere ( sorry, forget who but it is a great rule), with mortgage interest that is eight hundred thousand pounds which is a before tax income of one point two million pounds.   ............

 

On 4/14/2017 at 11:48 PM, tyres said:

Can someone post a link to this rule , I couldn't find it using the sites search , thanks

 

123 rule doesn't really apply so much against the low-rate teaser deals out there in the market, imo.

Although against very high prices, even low rates mask other risks imo, for those who do not look at the trade-off (unless rates stay so low long long term?)

 

Quote

 

2012 

I stick to the Lionel Ritchie rule, the once, twice, three times a lady rule. Its a rule of thumb rather thn an article of faith so you'll have to excuse the broad generalisation.

Borrow £10,000 (once) results in a typical repayment of £20,000 (twice) which for a typical basic rate taxpayer means earning £30,000 (three times). Or, to put it in plainer terms, an additional £10,000 offered is equivalent to a years work at average salary and even better offer £10,000 less and you could retire a year earlier. Instead we fixate on lending multiples at gross earnings which neglects tax and interest.

On the savings point, its rather futile isn't it? Saving (an extra) £400 severely cramps the lifestyle of a genuine typical Brit. Not the £500k+ prospective housholders on these boards admittedly. But for that sacrifice you end up with an extra £5000 in savings which is laughable in respect to housing costs. You wonder why you bother. I've got a savings target for the next FY of £800+ per month. Not going to get anywhere near it but you have to try. Even so, if successful, it would only amount to £10,000 which is only marginally less laughable. More rules of thumb but if you're earning around £40,000 you would be lucky to see £30,000 in your hand each year. That £10,000 that isn't going to go very far in house terms and it is a massive chunk of those earnings. When you start having dependents it becomes harder and harder. 

--


2012

Well, based on the loan value for standard SVR mortgage I've just looked at on my Banks website, you would actually be looking at £400k interest on a £400k loan over the next 25 years (that's if interest rates stay as low as they currently are - which I don't think anyone believes will happen.)

Now, look at some of the daft £450k terraced houses in Hale we've been discussing on the Hale & Alty thread. I can easily see those dropping by at least 10-20% in value over the next 5 years; maybe much more. But even at just over a 10% fall and no rises in interest rates, that's your £50k deposit gone (plus the loss of the interest it could have earned in an ISA/etc..) And in the first 5 years of mortgage payments, at £2.6-2.7k per month? Well, you've only paid off £26k of your house. But remember the interest on the loan? That's cost you another £121k in just the first 5 years. So, after 5 years, you are ~£180k down on a £450k house - if interest rates don't go up at all and your house only drops in value by about 12%. The reality is likely to be something much more severe, IMHO - a 30% fall in prices and interest rates at just 2% higher than today gives a loss of over £300k on a £450k house in just five years. And what have you got for that £180k-£300k of investment? Just £26k worth of equity in a house (and minus all your other costs for 5 years - moving costs, stamp duty, maintenance, etc., you don't even have that!)

So that, to me at least, is what is so frightening about buying in the current market. Not a single young person under the age of 35 I speak to can afford to buy at current prices. And for those that do, the doubling and trebling of houses prices needed to wipe out the enormous amount of interest they'd paid in the first 5-10 years of ownership is just not going to happen. Scary stuff indeed.

 

... teaser rates even lower, SVRs lower, and those £400K terraces now £570K+ asking (imo)

2004-2012... math math math.... 

 

2014...... math math math.  

Math has been proven scientifically wrong against BTLer double-downers, and ripple-sweet-spot believers, paying ever higher prices (imo) in foreverHPI.

XLm7JCgE.jpg

 

 

1LE3pSWY.jpg

 

Quote

FT: Affordability Backwards 

Feb 19, 2014 

.....the initial interest payment on a £100,000 repayment loan at a 15 per cent interest rate is the same as that for a £300,000 loan at 2 per cent.

 

Quote

HPC Member: Bear Hug
Becomes more interesting when capital repayments are considered. £15k wipes out 15% of 100k loan and only 2% of £300,000k.  Or very roughly, doubling payments compared to interest-only will clear your debt in 6 years at 15% or 50 years at 2%!

 

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Took them how many months and drops though...! Will keep a keen eye on LR for it in a couple of months time. Incidentally today I've seen the first notable drop of a house I'd have expected to have sold in the bracket below - 330k down to 300k... This too gives me the warm fuzzies

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Plus just noticed they had to go multi agency back in Feb,  original link doesn't work and have only been on with Beresford since Feb when on Zoopla was OM since last year... looks like they had to do a bit of work to sell this!

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