Saturday, Mar 15, 2008
Retired Teacher is fleeced
Guardian: Where does buy-to-let go from here?
A flat was to be this woman's pension. Now she is trapped by negative equity and soaring costs.
It was never a get-rich-quick scheme - I accepted I would have to wait before gaining," she says.
Connells would not comment on the gap between its valuation and Judith's experience but stated: "The valuation was by a qualified chartered surveyor and would have been supported by appropriate market evidence."
Posted by mken @ 04:22 AM (1069 views) Add Comment
17 Comments
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1. paul said...
"The valuation was by a qualified chartered surveyor and would have been supported by appropriate market evidence."
Yes, but quite often these surveyors are in cahoots (or even employees of) the estate agents, ramping up prices. This is what the More 4 documentary was all about a couple of months back. Qualified? Sure! Impartial? Not so sure.
2. paul said...
"Pimlico, and associated company Shevell Properties, were contacted by Guardian Money but did not respond."
Too busy bundling money into suitcases and paperwork into shredders no doubt.
3. Fed Up said...
I think that the future for BTL apartments is obvious: when prices hit *rock* bottom, they should be purchased by councils and housing associations, preferably the latter where the tenants have a say in the management, so that they do not end up becoming slums. I'd suggest that if the properties are deliberately left empty that compulsory purchase orders are put on them and the landlords should accept what they get paid for them.
4. who stole my pension? said...
These, new build, two bed flats will be toxic waste for years, if not decades. Give it another 18 months, when the recession is in it's depth, and I reckon the flat will be worth about 40k i.e. the actual cost of construction.
I can feel yet another string of miss-sold scandals coming. Who do the BTL expect to pick the bill up for them? Not me thats for sure!
5. japanese uncle said...
The rent should have covered the interest. But all I get is £500 a month out of which I pay £120 in service charges and £50 to the estate agent, leaving just £330. I can't see where Connells found tenants paying the sort of money they said I would get.
-----------------------------
Naughzty naughtzy. Should have done a homework to do some survey herself in the local rental market.
6. Letthemfall said...
Of course this is a mis-selling scandal. Problem is there is no regulation under which to sue these dodgy dealers.
Shocking how people can be so naive when so much money is at stake. But that is what happens when housing becomes an investment fetish.
7. Jimmyb said...
What a disaster, I do feel for this woman, the have been duped into this madness by nothing more than financial illiterates like thousands like her.
This example should be shown in newspapers and on television everywhere, to ward people of what can happen if you don't know exactly what you are doing, but it won't because too much of the media is governed by property advertising and making its middle class house owning ignorant readership feel very clever
8. European-bear said...
Yes the woman was stupid, very stupid. But to me it is a clear case of miss selling and why BTL needs to be regulated like any other financial investment. I hope Connells are made to pay. Clearly the level of rental they told this woman was an outright lie.....
9. happyrenterz said...
"When the fixed rate runs out in September, her only option is to stick with GMAC because the flat has fallen in value. Other lenders limit loans to 85% of market value (about £120,000 for the Bradford flat) and restrict monthly payments to 80% of the rent - £400 here.
GMAC will refinance the flat but it says she must pay £1,299 a month (a rate of 8.75%), or nearly £1,000 more than her rental income after costs. "
Wow I never realised how trapped these people are when they go into negative equity! Cut your losses and sell love.
10. mark wadsworth said...
Imagine Judith Andrews multiplied by a hundred thousand other mugs and feel the warm glow.
11. bystander said...
"Imagine Judith Andrews multiplied by a hundred thousand other mugs and feel the warm glow."
.......I want a house price crash, like everyone else, but it is not these poor suckers who should pay but the agents, surveyors and conmen/women (builders) who should all be looking at long jail terms and life long bankruptcy, advertised throughout every newspaper in the land.
12. drewster said...
For now the problem seems to be confined to new-build apartments in northern cities. In Liverpool, Manchester, Bradford, Leeds, Sheffield, and Newcastle-upon-Tyne, there's a whole swathe of these developments with shiny new flats marketed at over £200,000. The local employment markets don't provide enough high-paying jobs to support such prices. There are plenty of decent-quality houses in the suburbs available for under £100,000.
I haven't yet seen any sign of plummeting values in houses (not new-build flats), or in the south.
13. montesquieu said...
@ drewster
A northern problem? Been to Bristol lately? Remember Sadly Broke (sorry, Bradley Stoke) last time? Well this time it's Bristol Harbourside that's suffering 30-40%% falls. Or some parts of Reading? (Have a look on Propertysnake). Oh and what about that BBC programme about the cute lady broadcaster whose london Thames-facing flat has fallen 40%? That's only the ones I know about.
Try not to generalise on the basis of not getting out much.
BTW Iove how the lady in the article evades responsibility for making a duff decision, being 'persuaded' by an estate agent to go BTL. Duh, he's there to sell you something, not give impartial advice. These numpties deserve all that's coming.
14. planning4acrash said...
Bristol Harbourside is a slum now. So many bars, one after another, run by corporate chains that attract hoards of chavs and all of the west country stag and hen do's. Its aweful and I don't know why anybody would ever want to live there. They would have been alright if they'd had a good mix of restaraunts and cafe's alongside the bars, but the harbourside is a dump now. I was thinking about moving there from London but have been put off it after visiting recently, and there has been little effort at regenerating the aweful area just north of the city, with its terrible road systems, dead office areas and downtrodden arterial routes.
15. Planning4acrash said...
www.propertysnake.co.uk now at 128,971 almost at the level it was just before the post rate cut bounce that occured just before Christmas.
16. Fed Up said...
montesquieu
True there are numpties about. There are also lots of 20-somethings, fed up with living with parent(s), who:
1) are too young to remember the last crash.
2) have been brainwashed by all the media property porn that they MUST get on the ladder or they will get left behind.
The 20-something son of one of my work colleagues wants to buy a flat. As best I can, I'm trying the persuade his father that it his paternal responsibility to stop his son from making the worst mistake of his life. Kids must learn from their mistakes, but there are limits. He just has to be patient, carry on saving up for the next few years and then look to buying a HOUSE.
17. who stole my pension? said...
Perhaps she should enrol at the Open University and do this course in personal finance http://www3.open.ac.uk/courses/bin/p12.dll?C01DB123 You and your money: personal finance in context DB123.