Sensible Pricing In Edinburgh

[guitarman001]

Secretary at my old work on below £20k has one of those new-builds up at Gorgie; paid a hell of a lot for it. I couldn't believe it when you compare the price of the place to her salary - can't imagine she's too pleased now.

[fflump]

Old article but pretty interesting.

Stone

"The worst-hit areas in the capital are understood to be Marchmont, Gorgie, parts of Morningside, Abbeyhill and Leith."

"The Scottish House Condition Survey looked at 30,000 properties and found that the repair bill for privately-owned homes was £5 billion, with council and housing association flats making up the rest."

That money is just not available for repairs. Not since HPI has stopped anyway. This is going to be a huge story in the next few years IMO. With the high house prices paid for these places there can't be much left for massive bills that must be coming to these places.

Just imagine if more and more of these started to happen. Word got around. That 250k Marchmont flat could fall in price massively very very quickly.

Is it reasonable to get a full stone survey on an entire building if you buy a flat in it ? What sort of money are we talking about here for a proper survey by an expert ? And I assume you would have to ge the whole building done to make it worthwhile.

Yes it is an old article and things have moved on substantially since then. 2005-2009 the council swept through the whole of Bruntsfield and Marchmont inspecting stone work and slapping statutory notices on any tenements with defective/crumbling stonework/chimneys/roofs. In what was a bonanza for stone masons and scaffolders alike works were springing up everywhere-there were times in 2007 when half of bruntsfield place was scaffolded up. I was living in Bruntsfield at the time but my stair was OO and we had regular maintenance program and just got stung for £600 for a piece of chimney/roof that 4 stairs were jointly responsible for.

Anyway, suffice to say Marchmont and Bruntsfield has largely been done and risks of more big repairs lower than elsewhere. They were done first because the residents are wealthier and easy meat compared to Gorgie and other areas like fountainbridge. I don't know whether the council has been through Gorgie yet.

[Agentimmo]

I think you're taking the "own after 25 yrs" too literally. Of course you may move etc but the point is you The real problem arises if you never buy-in 2035 rents will be a lot higher than today and blowing all your meagre pension on rent would be a pretty c r a p existence. The skill in the current downturn will be having the balls to call the bottom and take the plunge when all around have lost faith in the housing market!

Rents usually follow wages. In 2035, the ratio will be approx the same as today. As it was in 2000 / 1990 / 1980 etc.

I agree that calling the bottom will be difficult. But buying at today's still bubble-inflated prices on a SVR that is at a historic low, is still a big risk (madness, even.)

I bought in 1996. But rented for the 8 years previous to that date as HPI was rampant. Wouldn't have a problem renting in the future - especially if I can get a 3 bed flat for 30% less than the current mortgage would cost per month.

[Scunnered]

Old article but pretty interesting.

Stone

Here's a more recent article on the same subject, from June this year: Leaving no stone unturned to mend crumbling homes (already discussed here, here (although the link doesn't seem to go to quite the right place)).

Edited October 28, 2010 by Scunnered

[Agentimmo]

He is on a 2.89% mortgage for 2 years. He is hoping interest rates aren't rising in 2012....

Has he calculated how much his monthly repayment will be when he switches to a SVR in 2 yrs time?

If his bank force him onto a 5 or 6% rate, I suspect he may be toast.....................

They are not called "Teaser Rates" for nothing.

[EdiLass]

I think you're taking the "own after 25 yrs" too literally. Of course you may move etc but the point is you are buying £250k of housing stock and locking it in at 2010 levels and paying it up to 2035. Whether that it s good move or not is a matter of debate-2013 may be infinitely preferable but few would argue that in 2035 prices will be a lot higher.

The real problem arises if you never buy-in 2035 rents will be a lot higher than today and blowing all your meagre pension on rent would be a pretty c r a p existence. The skill in the current downturn will be having the balls to call the bottom and take the plunge when all around have lost faith in the housing market!

The way I did my calculations was to pick a life expectancy (I chose 81 years), and calculate how much I would spend in total if I rented a flat on my street, and how much I would spend if I bought a flat on my street. I was 49 at the time and didn't plan on moving. It turned out to be about the same either way. I didn't factor in inflation, which was okay for buying since I had a 10 year fix lined up. I then calculated a "break even" price for each year. It turns out in my case that even with rents being less than mortage payments, the house price could fall year on year by ever increasing amounts before it would cost me less to rent and then buy.

What swayed me my disability, I wanted to buy so I could adapt flat and stay in it. Of course I could have got the life expectancy wrong, but it seemed a simpler way to do it

[fflump]

Has he calculated how much his monthly repayment will be when he switches to a SVR in 2 yrs time?

If his bank force him onto a 5 or 6% rate, I suspect he may be toast.....................

They are not called "Teaser Rates" for nothing.

yes a 2 yr fix is a poor choice IMO.

He had just about a 40% deposit. You can fix for 5 yrs at 3.69% with that.

[Democorruptcy]

Has he calculated how much his monthly repayment will be when he switches to a SVR in 2 yrs time?

If his bank force him onto a 5 or 6% rate, I suspect he may be toast.....................

They are not called "Teaser Rates" for nothing.

I think he has been lulled into a false sense of security about the impact of higher rates. He was worried about being able to secure and then pay a mortgage in the £90k's but when Lloyds offered him £115k he seemed to think they know more than him about money things so everything will be OK. Lloyds have dispelled any money worries he had, otherwise I don't think he would be regretting not waiting for the £185k house and adding another £19k to the mortgage. I think if had applied for the mortgage before making an offer on the house he bought - he wouldn't have bought it - once they told him he could have £115k he would have upped his budget.

[ccc]

Yes it is an old article and things have moved on substantially since then. 2005-2009 the council swept through the whole of Bruntsfield and Marchmont inspecting stone work and slapping statutory notices on any tenements with defective/crumbling stonework/chimneys/roofs. In what was a bonanza for stone masons and scaffolders alike works were springing up everywhere-there were times in 2007 when half of bruntsfield place was scaffolded up. I was living in Bruntsfield at the time but my stair was OO and we had regular maintenance program and just got stung for £600 for a piece of chimney/roof that 4 stairs were jointly responsible for.

Anyway, suffice to say Marchmont and Bruntsfield has largely been done and risks of more big repairs lower than elsewhere. They were done first because the residents are wealthier and easy meat compared to Gorgie and other areas like fountainbridge. I don't know whether the council has been through Gorgie yet.

Inspires me with confidence...........

Here's a more recent article on the same subject, from June this year: Leaving no stone unturned to mend crumbling homes (already discussed here, here (although the link doesn't seem to go to quite the right place)).

Interesting.

[fflump]

Inspires me with confidence...........

A flippant reply ccc but the fact is that if anything the council has been over-zealous in ordering repairs in this area-something that the article posted by Scunnered aludes to.

[Deleriad]

yes a 2 yr fix is a poor choice IMO.

He had just about a 40% deposit. You can fix for 5 yrs at 3.69% with that.

That's the gamble. At the figures mentioned I would have considered fixing but I would also be thinking that I have something like 40% in equity so remortgaging to a fixed rate is always going to be an option when the time comes. What no one knows right now is whether we are in for a sustained period of low interest rates, a gradual climb or a spike. I personally would defend myself against a spike but would probably do it by taking the lowest available term tracker with no ERC and switch to a fix when needed.

Of course it's all a moot point if he ended up buying the wrong house for him but that's a whole other issue.

[Agentimmo]

I think he has been lulled into a false sense of security about the impact of higher rates. He was worried about being able to secure and then pay a mortgage in the £90k's but when Lloyds offered him £115k he seemed to think they know more than him about money things so everything will be OK. Lloyds have dispelled any money worries he had, otherwise I don't think he would be regretting not waiting for the £185k house and adding another £19k to the mortgage. I think if had applied for the mortgage before making an offer on the house he bought - he wouldn't have bought it - once they told him he could have £115k he would have upped his budget.

Could he not have used any one of the numerous online "mortgage calculators" to verify himself. Would have taken about 5mins to see the difference in repayments (£'s) bewteen 2.5% and 5 or 6%.

Simple maths that a 14yr old could handle.

It's all too easy to blame the banks. A bit of sensible due diligence is all that's required when you are buying anything over a month's salary, imo.

[ccc]

A flippant reply ccc but the fact is that if anything the council has been over-zealous in ordering repairs in this area-something that the article posted by Scunnered aludes to.

Wasn't being flippant. Most things the Council puts it's hands too turn to pish !!

As in the original story - there is the issue of what stone is being used for these repairs, the people that are doing it etc....

Perfectly possible that some of the jobs done in this great rush were of a shoddy nature no ?

It is interesting to note int he 2nd article that much of the stone has a 'life' of about 100 years. Now what happens when that is up ? Is it just continually fixed/replaced until the buildin gis essentially completely rebuilt (As in the Golden Gate Bridge_. If so then arent the cost/frequency of these repairs going to gradually climb as the buildings get older and older ?

No idea myself. Just seems common sense - especially with sandstone that is not known for it's durability. Those ******* up in Aberdeen with their Granite will have no such issues for a long time to come !!

[Buying]

Old article but pretty interesting.

Stone

"The worst-hit areas in the capital are understood to be Marchmont, Gorgie, parts of Morningside, Abbeyhill and Leith."

"The Scottish House Condition Survey looked at 30,000 properties and found that the repair bill for privately-owned homes was £5 billion, with council and housing association flats making up the rest."

That money is just not available for repairs. Not since HPI has stopped anyway. This is going to be a huge story in the next few years IMO. With the high house prices paid for these places there can't be much left for massive bills that must be coming to these places.

Just imagine if more and more of these started to happen. Word got around. That 250k Marchmont flat could fall in price massively very very quickly.

Is it reasonable to get a full stone survey on an entire building if you buy a flat in it ? What sort of money are we talking about here for a proper survey by an expert ? And I assume you would have to ge the whole building done to make it worthwhile.

On a positive note I believe the building this news article refers to with the huge bill was a large corner building therefore I would imagine with twice the repair work of a regular building, plus it made news because of the extreme situation. I'd avoid purchasing a corner building that's never had work done that's for sure however in general if a tenement has responsible owners then work is of the maintenance category and being that bills are split then providing owners have rainy day house repair money, something all homeowners should put aside for, there shouldn't be a huge problem. My bill for £1000 to bring my tenement building up to a clean bill of health never made the headlines... A headline such as 'Living in a properly maintained Tenement may cost you £1000 every few years' just doesn't sell news. All homeowners have gutter, roof, pointing costs etc, aah the joys.

[Democorruptcy]

yes a 2 yr fix is a poor choice IMO.

He had just about a 40% deposit. You can fix for 5 yrs at 3.69% with that.

He did have a 40% deposit and I emailed him a link to the sort of deal you mentioned but he told me he banks with Lloyds and "they have always been very good".

[noodle doodle]

On a positive note I believe the building this news article refers to with the huge bill was a large corner building therefore I would imagine with twice the repair work of a regular building, plus it made news because of the extreme situation. I'd avoid purchasing a corner building that's never had work done that's for sure however in general if a tenement has responsible owners then work is of the maintenance category and being that bills are split then providing owners have rainy day house repair money, something all homeowners should put aside for, there shouldn't be a huge problem. My bill for £1000 to bring my tenement building up to a clean bill of health never made the headlines... A headline such as 'Living in a properly maintained Tenement may cost you £1000 every few years' just doesn't sell news. All homeowners have gutter, roof, pointing costs etc, aah the joys.

I've spotted the flaws in your plan :-)

The law had to be changed because it used to be one person could block a repair agreement made by everyone else on the stair. There was an attempted murder in Bruntsfield related to this - http://www.law.ed.ac.uk/sln/blogentry.aspx?blogentryref=7463 . Some guy arranged to have his neighbour killed who'd been blocking repairs and ended up costing everyone twice as much when the ensuing statutory order kicked in. The maths had been explained to the neighbour constantly, i.e. cheaper this way, but he wasn't for listening.

Now it's been changed to decisions can be enforced by a majority of residents, but still you'd have to take those other residents to court to pursue their share if they don't pay up voluntarily - and in the meantime the agreeing owners would be liable for the full amount if their names were on a contract. The roofers I dealt with a few years back demanded a signed form from every owner saying they'd pay up before they began work.

Add in absentee landlords, and owners who've stretched themselves to buy and you have a combination of circumstances whereby people won't/can't pay their way in terms of shared repairs. Wasn't there a story in the main forum that a third of brits only have enough savings to cover 2 weeks living expenses? Even a modest £2,000 roof repair bill would exceed this limit.

[ccc]

I've spotted the flaws in your plan :-)

The law had to be changed because it used to be one person could block a repair agreement made by everyone else on the stair. There was an attempted murder in Bruntsfield related to this - http://www.law.ed.ac...ogentryref=7463 . Some guy arranged to have his neighbour killed who'd been blocking repairs and ended up costing everyone twice as much when the ensuing statutory order kicked in. The maths had been explained to the neighbour constantly, i.e. cheaper this way, but he wasn't for listening.

Now it's been changed to decisions can be enforced by a majority of residents, but still you'd have to take those other residents to court to pursue their share if they don't pay up voluntarily - and in the meantime the agreeing owners would be liable for the full amount if their names were on a contract. The roofers I dealt with a few years back demanded a signed form from every owner saying they'd pay up before they began work.

Add in absentee landlords, and owners who've stretched themselves to buy and you have a combination of circumstances whereby people won't/can't pay their way in terms of shared repairs. Wasn't there a story in the main forum that a third of brits only have enough savings to cover 2 weeks living expenses? Even a modest £2,000 roof repair bill would exceed this limit.

Was going to say much the same. I do agree with buying that there will be a lot of lower valued repairs that do not mkae the headlines. Also anyone who owns any 'property' can have the same issue - whether they own it themself or as part of a block.

However the potential hassles invovled with a shared repair would be enough to give me nightmares.

Hell is other people. A very apt quote I imagine when a subject like this appears.

[Scunnered]

The law had to be changed because it used to be one person could block a repair agreement made by everyone else on the stair. There was an attempted murder in Bruntsfield related to this - http://www.law.ed.ac.uk/sln/blogentry.aspx?blogentryref=7463 . Some guy arranged to have his neighbour killed who'd been blocking repairs and ended up costing everyone twice as much when the ensuing statutory order kicked in. The maths had been explained to the neighbour constantly, i.e. cheaper this way, but he wasn't for listening.

Fantastic! If you're a renter I wonder if you can require your landlord to pay for hitmen for this kind of thing?

Also, there's a very handy tip from the stonework article:

[A senior surveyor in Edinburgh City Council's property conservation department] says it is the south-west side of any building in the city where the worst decay is found because that's where the wind and rain come from.

Edited October 28, 2010 by Scunnered

[fflump]

Here's hoping everyone gets scared s***less of stonework repair bills, goes off and buys some flimsy Wimpey home, and leaves all the nice sandstone period property for me to buy at a knockdown price

[Buying]

Darn those irresponsible home owners, now I'll need another savings account. I suppose there's room on my mantlepiece next to my 'next million' piggy and 'diamonds funds' piggy for 'hitman' piggy bank.

[ccc]

Here's hoping everyone gets scared s***less of stonework repair bills, goes off and buys some flimsy Wimpey home, and leaves all the nice sandstone period property for me to buy at a knockdown price

Erm that is not the point....

[curious]

Hell is other people.

ccc, I am very impressed with your quote of Sartre. Indeed, a dash of existentialism helps to spice up this forum.

[fflump]

ccc, I am very impressed with your quote of Sartre. Indeed, a dash of existentialism helps to spice up this forum.

I was more impressed the 1st time he quoted it, and the 2nd time, and the 3rd....

[geneer]

I was more impressed the 1st time he quoted it, and the 2nd time, and the 3rd....

zzzzzzzzzzzzzzzzzzzzzzz

[ccc]

I was more impressed the 1st time he quoted it, and the 2nd time, and the 3rd....

Scandalous !!

I think I have only quoted that twice.

And anyway a class quote is good for numerous airings.