Wednesday, Jan 28, 2009
Not Sayara Begg this time
BBC Radio 1: Debt diaries
Chris Guy bought his place a couple of years ago for £153,000. But now the value of his house has fallen to about £120,000.
"I feel a bit gutted really. It's a bit of a shock to find I'm about £33,000 down on what I paid for it," he says.
Debt counsellor Chris Tapp says there's no easy solution to the problem of negative equity.
He says: "There's not a huge amount Chris can do, particularly in the current market. But, over the course of a number of years, house prices are likely to go back up."
"So actually in five or 10 years, he's still likely to make a tidy profit."
Posted by little professor @ 12:57 PM (1880 views) Add Comment
19 Comments
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1. 51ck-6-51x said...
What a non-story! Does Chris *need* to do anything about it? He was worried about interest rates going up (because he was going to have to switch to a new mortgage) and now he is relieved, but gutted that he's made a 33K loss... is he planning to sell? Was it an investment property?
2. Neo-serf said...
"So actually in five or 10 years, he's still likely to make a tidy profit."
No he's not.
3. paul said...
The BBC's portrait of Sayara:
What she actually looks like:
I've just re-read the articles about her debt diary too. Some classic quotes there.
"I am facing repossession (of my buy to let property). Why can't they just leave me and my baby alone (innit)?"
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. Home Counties Expat said...
He didn't actaully realise he was a mug for paying over 150 grand when it's true value is about 60 grand then?
6. Wun Ung Lo said...
Radio 1 is definetely the place to seek any sort of financial advice. Not.
7. it_is_going_with_a_bang said...
Well I would like to know which bank re-financed his property and gave him a great deal whilst in negative equity....
Sounds like he wanted to be a property porn star and move every 2 years until he was a millionaire from all his buying and selling skills.
Boo hoo.
8. rm96696 said...
I would have thought that even a charity would be able to find a decend debt counsellor. Why does he think that" house prices are likely to go back up. So actually in five or 10 years, he's still likely to make a tidy profit." Isn't this the sort of idiotic thinking that got us into this mess? A group of american academics recently studied the major financial crises of the 20th century and found that house prices drop for an average of about 5 years after major financial crises (i.e. they hit the trough after 5 year, not that they take 5 years to recover). Unless he saves some money to pay off the balance I think that chris should resign himself to the idea that he's chained to the dump he overpaid for the rest of his life. Where was he thinking he was going anyway? To spain to bask in the sun with his "tidy profit"?
9. str 2007 said...
I heard this myself on the radio and wondered where they got there financial adviser from.
Paul
What has that got to do with the article or am I missing something ?
10. icarus said...
Anybody who says "he'll make a tidy profit" under these circumstances should be offered the house for £153,000. What will he say then?
It's like "unrealised profits" or "fundamentally sound companies temporarily in dire straits". Tell it to the birds.
11. paul said...
str2007, Sayara hasn't got anything to do with the article directly. I was just reminding readers of how the BBC has tried this before, and been ridiculed for siding with the hapless, inanely indebted interviewee.
12. str 2007 said...
Sorry off topic
Can anyone remember an article a few months a go when one of the lenders had started to send out LTV letters to 'One Account' mortgage holders. Basically requesting them to keep within the agreed LTV when the mortgage was taken out ?
I've looked but can't find the article.
13. str 2007 said...
Paul
Oh, was looking for a link in the article to another about Sayara.
14. will said...
Chris Guy's home will be worth £100 K by the end of 2009. (35% drop)
15. will said...
and can Chris Tapp guarantee that Guys' home will be worth more in 5 or 10 years. I don't think he can.
16. fjcruiser said...
Tidy profit in 10 years ? he ll be lucky if his pad reaches this level in 10 years. During last recession, the average property price did not recover until 2000.Past performance is no guarantee of future performance.
17. japanese uncle said...
Sayara Begg suddenly started to look much older, because of the worry?
I remember she was already suffering enough as early as 2007. Poor woman. Poor judgment
18. mountain goat said...
Debt diary USA style: NY Times: Deep in Debt, and Now Deep in Worry
19. dohousescrashinthewoods said...
"So actually in five or 10 years, he's still likely to make a tidy profit."
Ok, in real terms, to break even..
Any advance on 10? Yes, I have 15.
Any advance on 15? 15? I have 20. Thank you sir.
Any advance on 20? 20 years ladies and gentlemen...