Sunday, Oct 19, 2008
BTL Ghost towns
The Sun: Des Res to Dead Res
Two years ago all 84 of these luxury flats in this Thames side development were sold, for up to £400,000.
Incredibly, just two years on, the prestige development lies virtually ABANDONED.
Neglected, overgrown and swarming with vermin, Hill House today stands monument to the savage effect of the credit crunch.
A staggering EIGHTY-TWO of its EIGHTY-FOUR homes have been repossessed.
Empty apartments are infested with rats and cockroaches.
Windows have been broken and mailboxes smashed open by squatters and junkies, while stairwells have been disfigured by graffiti.
The local council have bought 22 of the empty flats, allowing council tenants paying as little as £380 a month to live in flats once valued at a quarter of a million pounds.
Posted by little professor @ 11:53 AM (603 views) Add Comment
13 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Will said...
what about the lack of available homes ...
2. Adrian said...
Valued now at £130k, but who in their right mind would pay that to live there? Looking at the current rent, its not even worth half that.
3. yorkshireman said...
In our little Yorkshire Dales village, we have 110 new homes in various stages of being built and only 2 or 3 are sold. There have been heated public debates and meetings about a proposal to build between 2000 and 2500 more in the immediate vicinity for Leeds overspill during the next 6 or 7 years. Looks like they never learn.
4. plato said...
yorkfhireman.......
This too happened in villages in West Sussex as the larger towns in other counties and some within spilled over. At the same time Schools,Hospitals,Medical Centres,Post Offices were removed or amalgamated. The Police were removed and centralised in far off towns and the overspill from the towns/cities were largely criminal. Most of this I watched happen over the last few years thanks to government policies.
5. Camping said...
ouch the price to crash in a house. i wonder how the holiday second home market is doing ( hands free diy bnb, ) in the norfolk village of cley next the sea over 50% is vacant
for most of the year, they dont build there.
6. japanese uncle said...
The pent house is now valued at 135K, as compared to 400K at which it was originally sold. So 66% HPC is already the reality here just less than 16 months since the collapse actually started. Just imagine how bad it will be for the next few years to come. Eventually HPC may well reach 90% here, given the horrific circumstance as described in the article. Make no mistakes, 90% HPC is no fancy at all.
7. p. doff said...
3. japanese uncle said...''So 66% HPC is already the reality here''
That is, of course, on the assumption that they were worth £400K in the first place.
My view is that they weren't, as the market was distorted by speculators (and BTL in particular) who fell for the hype. They essentially created their own market and caused a bubble within a bubble. Blow away the froth and the true picture emerges.
Of course, it all depends upon the definition of value. I know, I know, '----- between a willing buyer and willing seller, without ---- etc etc' so the valuers are unlikely to be accused of overvaluing. However, the banks are now set to learn the true meaning of the definition of 'estimated restricted realisation price'.
8. japanese uncle said...
p.doff
House price as defined in HPC should be referring to published list price, not to the actual/real value, I guess. If real value is discussed, there should be no HPC at all, as current inflated house prices are basically all nominal, and not endorsed by the geuine value. The problem is so many people are actually paying the price on the basis of such fictiona nominal price.
9. p. doff said...
JU. So your 90% HPC is from the highest asking price of a particular property to it's eventual sale, assuming this is achieved at the bottom of the market? I agree that this may be the case in some instances as some of the asking prices are even further detached from reality than the normal 'froth'.
But the standard 'willing buyer and willing seller' old definition is closer to what I have described, and also assumes the parties had each acted knowledgeably and prudently. I'm not sure what percentage of buyers met this criteria, especially when some BTL hadn't done any research and indeed hadn't even seen the property in some cases, relying on some 'property club' selling them a dream - now turned nightmare.
In terms of valuers exposure to overvaluation claims, should the valuer have seen through the froth and decided that his comparable sales evidence did not meet the required criteria (as few buyers were acting knowledgeably or prudently) and therefore couldn't be relied upon to justify the next overpriced sale? I don't know the answer, but I do know that aggressive lenders will be trying to recover their losses from anywhere they can (as happened in the last crash), and some lax valuers who 'rubber stamped' transactions to meet their corporate employers targets (to achieve a fat bonus) will be feeling a little uncomfortable now. In turn, insurance claims for professional negligence are likely to escalate. The money goes round and round.
10. nooneo said...
p.doff.
The valuers, surveyors, estate agents, buyers, sellors, mortgage companies, banks, and of course the general population bought into this nightmare. Of course 400k was an overvaluation, but it happened. It happened because all the people in the buying chain accepted the valuation. A case of fooling enough of the people, all of the time.
In just the same way as JU may well be right in his assumption that 90% is a reality. People will buy into the falling market next year and think they have just got in ahead of the market bottoming. Then, over the next 18 months we will here their own sob stories of how they "paid over the odds" and their properties have gone into negative equity, even though they bought at 25% lower than the peak. This will have the effect of destroying the market all over again.
Only when the bottom is reallly reached will it be worth it. It's Ok when you know you can face the falls and they become smaller as the bottom is neared. But you might as well go on holiday rather than losing thousands on a property that is still falling. In reality this will only be reached when the size of the falls is equal to the rent you are prepared to pay. Let us not forget that all these swanky new apartments come with swanky new management and freehold fees.
11. p. doff said...
7. nooneo said...''People will buy into the falling market next year''
They are doing it right now.
Mate of mine has just put an offer in at the asking price, and seems to be happy with the deal. He accepts that it is likely to go down in value but is downsizing having recently sold his previous place after making a killing.
12. nooneo said...
p.doff
As my mum used to tell me "A fool and his money are easily parted" - This is the nonsense that happens when property bubbles are not controlled (and they can be). People should not need to worry about property prices and losing money on them.
I can't stand they way this nonsense is allowed to happen. This time it is going to be so much worse than the 80s/90s crash. I hope your friend doesn't lose too much, and I suppose it's reasonably OK if he made a killing on property in the first place. We need tighter regulation, less immigration, more social housing and automatically higher interest rates if property goes beyond 5-10 above inflation. We have to stop using our properties as ways of making money and start actually doing things for a living.
I would like to buy now, but I can't afford to be in negative equity, nor can I afford to lose my precious savings (inflation's doing a pretty good job though). I can't imagine buying here for another 10 years now and am slowly resigning myself to moving across the channel to france where some semblence of normality has controlled the property market there.
The madness of sh!tty little houses, costing 300k, in our rain soaked, hoodie and youth infested streets, with little or no possibilty of prudent people ever getting ahead of the game is thoroughly demoralising. This country really is starting to stink. Everyone is either on benefits or expects to get 30k for doing nothing in an office all day is just what we expect really, after 63 post war years of complete and utter political incompetance and trough feeding by our politicians.
Now we have the prospect of the blubbermint helping to bail out everyone who but those who HAVEN'T over stretched themselves in this boom. On benefits, we'll help you. Can't afford to pay your mortgage, step right up. Worked hard and not bought into the madness, just fook off and pay your taxes.
No more boom and bust is going to become such an annoying mantra, as the recession bites, and the general public start to realise that this mess is going to take the best part of a generation to get better, in the meantime climate change will actually make things get a whole lot worse.
Someone pass me a rope.....please !
13. wiltshire said...
nooneo, part of the problem here is there is no lobby of the prudent. Look at all those people who queued to get their savings out of Northern Rock, there was a lot of them. I think I read a quote earlier this year that there are more savers in this country than there are people in debt. Odd though it sounds, I guess not everyone has fallen for the credit card/store card trap. It seems to me the government have decided to forsake the prudent for the others but the prudent will have their day. It'll be election day in 2010 and it will see off Labour for another 18 years (minimum).