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Once Bitten

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  1. Mark, and others, I just wanted to say I empathise. Bought a 1 bed flat for £50k in 1989. By 1991 it was worth £32k. This was in the South West. Like you, I was v young and everyone told me that I could do no wrong by investing in bricks and mortar. I couldnt bear to sit it out as the whole block went to the dogs while people handed back the keys. So I let it and I rented somewhere else. Still do, Sold said flat for £40k ten years later. (To A BTL of course, FTBs were snapping up 3 bed houses by then...) Used the hopeless endowment to pay off the difference. I dont even bother to see what they go for these days, I'd be surprised if it's still standing, it was a barratt home I wouldnt want anyone to go through the horror of negative equity, but unfortunately I can see history about to repeat itself in front of my very eyes has anyone else got 'that 1991 feeling'.......? I probably wont buy again unless it's abroad.
  2. Who saw Kirsty Big Boots doing 'comedy' on French & saunders last week.? Listen, love, don't give up the day job. Well, not till falling prices force you to.....
  3. "We dont have bombs dropping down on us or the threat of nazi invasion. " True. We just have suicide bombers who blow us up on the way to work. BTW, I know someone who teaches English at a uni in China, and earns enough to have bought a brand new apartment there ........ for £35k. However as with all new build in China, it's a shell- no kitchen units, bath etc etc. Not so much as a tap or a radiator. By our standards he doesnt earn much (probably about £9k) and he is one of the better earners as his Mandarin/Cantonese is fluent. My friend has no plans to come back here. Life is much simpler there. There is not the overwhelming greed, one upmanship and keeping up with the Joneses that has overtaken the UK. Why do people just want MORE of everything? The real difference between China and the UK? Not much. In Beijing I met people living in two rooms in incredible poverty. In the UK, this is known as buying a luxury apartment with a huge mortgage.
  4. This, people, is the moment we have all been waiting for. When the Daily Mail mentions the word homes and slump in the same story, the sheeple will begin to listen. (That's after they've read the feature headlined: Nigella: Is her bust fake?)
  5. I think it all depends on the EA. But there are people dropping their prices - I do regular RM searches, mainly to laugh at those properties that have been hanging around like a fart in a phone box for about 9 months now and have no hope in shifting at the ridiculous prices they are on for. But Ive also noticed that a few -- who haven't been on the market as long - maybe two or three months -- that have reappeared in lower price brackets. Have seen reductions of anything between £50 and £15,000. They don't seem to announce on RM that it's a price reduction or even a 'new price' (great euphemism of our time). Ive also noticed a lot more houses round here recently on RM with more than one agent.
  6. Hello I've been lurking in the shadows reading for a few months and posted a horrifically long and tedious first post yesterday on the main forum in response to some poor girl's newspaper blog about buying her first flat. Mainly cos it just brought on that feeling of history repeating itself. To sum up, I got caught badly in the last crash in 1990 when the value of my flat virtually halved. We made a lot of mistakes and I'd just like to warn people thinking of taking the plunge now that the price of property really can ....and most likely will.... go down. We rented out our millstone and rented somewhere else bigger, because we could not bear to sit it out while the whole development was repo'd around us and ended up run down and practically unsell-able --- if there is such a word. We later sold up to break even after 10 long years. (To a BTL tycoon of course, who haggled right down to the last teaspoon) Yep, we acted too soon. For a variety of reasons we've never bought again and are happy renting a property we could never afford to buy in an area we could only previously aspire to. (£790 rent pcm on a property worth £300k+) My worry is what will happen when I am a poor pensioner with no mortgage equity to live on and not enough dosh to pay the rent. If there is a crash- and I think there might be - I would consider buying again for that reason only. But I'd take some convincing. Life is for living, not about 'owning' some bricks and mortar. I've learned that the hard way Thanks for the interesting discussion and entertainment so far
  7. Hells bells, you are absolutely right. If I'd have thought about it before I got excited I would have drawn that conclusion too. We didnt suffer in this neck of the woods, but it is a big area for 2nd home owners and the EAs are targeting them I guess. I think people from other parts of the county will need to cast their net wide to find somewhere. Mind you, I cannot see any 2nd homeowners round here agreeing to let their rural retreats to flood victims. They just dont need the money or the wear and tear on their Cath Kidston soft furnishings!
  8. I rent in Gloucestershire where house prices are higher than sky high. I'm starting to see houses sticking on rightmove and maybe the odd reduction. However, maybe the first real sign of buyers getting truly cold feet arrived on my doormat today. Posh EA has sent a letter 'urgently requiring apartments and family houses for high quality tenants due to recent high levels of activity in the rental market'. Never seen anything like it before. Must be all those STRs . Or maybe like me no one can afford to buy a thing round here
  9. I've been lurking in the shadows and this poor girl's impending plight has finally nudged me to post ---I've got this horrible feeling of deja vu. It reminds me so much of when, in our mid twenties, we bought a flat at what turned out to be the peak of the market in 1989. Why? Lots of well meaning older folk telling us renting was dead money, we couldn't go wrong by putting my hard-earned cash in bricks and mortar etc etc. We didn't overstretch ourselves, only borrowed £50k (it seemed a lot back then but was only x2 our joint salary!) -- the market started to drop within minutes of me walking over the threshold. To add insult to injury, interest rates soared to 15%. I think our monthly payments started out at around £365 and at their highest point were £575. And just a couple of years later it was worth......£30k tops. The development (about 10 years old at the time) went to the dogs as people handed back the keys, got repossessed or did a moonlight flit (this happened quite a lot at the time, wonder if we'll see that phenomenon again?). And so.....the BTLs moved in. We knew that one day we'd recover and get another mortgage, so we tried to sit it out. Prices stayed in the doldrums for what seemed like forever. The very property you have saved for, tiled and painted comes to represent a massive millstone of misery round your neck. There is no joy in home 'owning' when you are in negative equity. Especially in a one-bed flat on a development where every other first time buyer has done a bunk. By now, your neighbours are all DSS (as it was then) tenants who stay at home all day playing loud music. Soon the once pristine cul de sac boasted peeling doors, overgrown gardens and rusting cars in the 'allocated parking spaces.' Utterly depressing. We got to the point when I'd have rather slept in the office than gone home. And this was no grim city but a market town in the South West commuter belt. Couldn't face selling and making a £20k loss. So what did we do? We 'let to rent' yep, you get so horrified by your mess, you let it out to someone else in a different sort of dire straits. By this time, interest rates have fallen and the rent almost covers the mortgage. We found a real bargain of a cottage to rent in the middle of nowhere. It was huge, delightful and affordable. Sadly there isn't a happy ending to this story but I'm happy to share it as a salutary tale to anyone who gets caught in the crash that most of us can see thundering towards us. We sold the flat to a BTL at the point where we broke even when prices started to recover. Of course, no one but a canny BTL wanted to buy a one-bed flat at that point as three-bed homes were affordable for most people on an average joint wage. We bailed out before the development became a total no go zone and the flat needed an entire refit. On reflection, we should of course have held out longer. Then came our 2nd mistake: We were so happy renting, we PUT OFF plans to buy another house Thought we'd get round to it, saved up a deposit and issued a deadline of my 40th. Three years before I got there, I managed to get cancer, and since then no one seems to want to lend me any money - even if I could afford or wanted to pay the ridiculous prices being asked for homes in my part of the world. What was a reasonable deposit in 2002 probably wouldnt buy a doorknob now. We've had to move to a much more expensive area due to work changes and our rent has doubled, so buying again - even as and when i get the magic all clear - probably wont happen unless prices fall some way. Both the houses I have rented have been on farms. They will never come to the market and if they did, I could never afford them. I'm 'cheating' by living in a very nice area in a property I couldn't afford otherwise. But I do worry about what I'll be able to afford to rent when I'm a pensioner, cos I wont be a rich one, that's for sure. That's the ONLY reason I would consider buying again. The moral of my numerous mistakes? DON'T be rushed into buying, the current prices are not sustainable. Life is for living. You can't take it with you (and other well-worn cliches.) If you MUST buy now, for God's sake don't buy a flat, especially one on a modern/new development. It'll be hell to shift when prices drop and people can get so much more for their money. If you do get caught in the crash, 'letting to rent' is a good way of moving on when you can't take the sight of your own 4 walls any longer. But tell your lender. And make sure you buy again as soon as you sell your original property. Sorry for the long first post. I appreciate my circumstances are highly unlikely to match anyone else's. But those of us who lived through the last crash can see something similar happening to people like Claire. In a year or two's time when her flat is worth considerably less than she's paid for it, it will have become her prison. And I will feel truly sorry for her. IMHO too much pressure to buy from the likes of Kirsty, Phil, Sarah and Kevin has fuelled this latest boom. Will Location x 3 still be on air in two years' time? I doubt it.
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