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Everything posted by TheCountOfNowhere

  1. Well, if they've constantly re-financed and bought many propertys at the peak leaving little equity in all their propeties then its a house of cards and in my opinion, looking at the figures, can come crumbling down very quickly. That's the problem with geared investments. Geared on the way up, geared on the way down !!! In my opinion Maths teachers should know how to add up....
  2. I was hoping someone with a 2 year old BTL flat (sorry, luxury executive apartment) empire was going to make a post and pull my observations apart...
  3. I could have done a more accurate model I suppose but I thought that simplified model shows the jist of it, i.e. HUGE losses, and I dont want to be responsible for any BTL investors chucking themselves out of un-lettable flat windows. EDIT: Sorry, did I call them flats, I meant luxury executive apartments.
  4. Everyone else is doing it, so you buy BTL flat 1: £10K deposit on flat at £100K, £90K mortgage. After 1 year: BTL flat value increases to £110K You have made £10K, 100% profit in one year, you're feeling clever, so you re-invest.... Remortgage flat 1 and take out the profit, £10K, you now have 100K mortgage, use the £10K as a deposit to buy another flat ( now flats are valued at £110K ) Now you have... Flat 1: Equity = £10K, Mortgage = £100K Flat 2: Equity = £10K, Mortgage = £100K You're telling all your friends you have a BTL portfolio of 200K and lots of equity...you are clever and rich !!! After another year: Both your BTL flats values increases to £120K You have made another quick £20K, another 200% profit on your original investment in one year....you have magically made a 30K profit out of 10K in 2 years..so you re-invest.... Remortgage the flats and take out the profit, £20K, use that to buy another 2 flat ( now flats are valued at £120K ) Flat 1: Equity = £10K, Mortgage = £110K Flat 2: Equity = £10K, Mortgage = £110K Flat 3: Equity = £10K, Mortgage = £110K Flat 4: Equity = £10K, Mortgage = £110K Now your friends are really impressed, you own £400K worth or property, lots of equity, you are doing well, you're thinking of remortgaging next year and spanking some of the equity on a new porsche. How clever and rich are you ? But wait.... As anyone with any sense knows....flats are sh*t and dont go up in value unless driven by speculation and stupidity, the media calls a HPC, panic sets in and so 12 months later flat value drops around £30K, a conservative estimate in the current climate. So, Flat 1 is now worth £90K, loss is £20K (money you dont have) Flat 2 is now worth £90K, loss is £20K (more money you dont have) Flat 3 is now worth £90K, loss is £20K (even more money you dont have) Flat 4 is now worth £90K, loss is £20K ( still feeling clever ? ) Total loss over and above the original investment: £80K, thats 800% loss. Not so clever now, still your empire is still worth £360K, if you can afford to keep it going. You're technically bankrupt. Anyone fancy starting a BTL empire ? Anyone with a BTL empire started in the last 2 years realise how much trouble you really are in ? A simplified view I know but when you see the figures you reallise what a risky business it is in a dropping market, big profits can quickly become HUGE losses.
  5. As you say, it's the froth thats been taking off at the moment, expect 30% decline in the actual selling prices that were last achieved.
  6. Looks like the C&E is turning bearish http://www.northamptonchron.co.uk/news/Hom...isen.3781592.jp "Many people remember the boom and bust policies of the last Conservative Government which saw tens of thousands of people lose their home because they could not keep up with mortgage payments. Now it looks as though the current Labour Government has blundered into a similar mess." Not sure about: "These families in 2007 paid the price for growing economic incompetence by Gordon Brown in Northampton. There are now serious concerns that in 2008, the situation will get worse." No one has held a gun to their head and forced them to spank the equity in their homes. EDIT: I had a think about this article and the 4% reported seems very low, especially when repo's are soaring everywhere else...I went back to make that point on their website and would you believe it, the facility to post comments for this article is not active, so no-one can challenge their comments....interesting, maybe they are fed up with all the negeative comments getting posted when they put up bullish articles.
  7. Sounds like she's playing "good agent/bad agent", tells you they were insulted, now agrees with your bid, she's trying very hard. Simple negotiation tactics. Just sit on it now. if they dont get any more bids they will sell it to you, otherwise go to auction and buy it for 100K.
  8. I bet they didnt !!!! The bank just want to minimise their losses. They will simply have checked it the value was over their minimum projected value, wether they thought they can negotiate for more and thats it's. Sounds like the agent is pulling their usual tricks. Stick to your guns now and dont let them trick you into paying more than its worth. A simple. "look, I dont care, it's a good offer, come back to me if they want to accept it" should suffice.
  9. I've heard they have changed it and it will be based on a lottery system !!! http://www.dfes.gov.uk/sacode/docs/FinalSACode08Jan2007.doc "Random allocation (lottery) 2.28 Random allocation of school places can be good practice particularly for urban areas and secondary schools. However, it may not be suitable in rural areas. It may be used as the sole means of allocating places or alongside other oversubscription criteria. Random allocation can widen access to schools for those unable to afford to buy houses near to favoured schools and create greater social equity." That pretty much devalues the over-valued wootton propertys by 15%. Not happy reading for a wootton resident !!!
  10. Is the grafitti: http://www.flickr.com/photos/[email protected]/2262376267 "143,637" - The ammount of negative equity in each flat !!!!
  11. Anyone with any sense would apply the price per square feet rule when buying a house. Obviously things like location, amenities, character affect that but as a general rule they should be that much different. The new build places price per square foot is way over inflated and eventually, when it's no longer a new build, the price per square foot has to come down to match the rest of the market, which is what we see in east/west Hunsbury. Wootton/Grange park will eventually drop to match East/West Hunsbury. As I said to an agent recently during a viewing....Me: "It's over-priced", Agent: "Yes, but its Wootton", Me:"It's a housing estate, could be anywhere"....say no more.
  12. Just sitting watching channel 4 and an advert for Dispatches came on, "How the banks bet your money"...it made me sit up and take notice with words like "recession", "crash", "1 million repossesions". Dispatches Channel 4 Monday 18 feb 9pm. What Crash....this crash !!!!!
  13. Bloke at work's landlord ( hence the anecdotal post ) had his place in Harrow valued last year £425K....this week values at.....wait for it....£375K
  14. Must have been an advert as I havent seen any comments from an agent on their website for a while, it sounds like he has changed his tune though. it's interesting that you now accept that your own price will be 3-5 % down, I think most people have realised this now. Just dont get into the "chassing the market down" scenario. I still think there are still too many over-priced places out there and a lot of vendors will now be happy to accept 10% below asking. Ive noticed loads of top end places coming on the market recently, im guessing people are trying to cash in their chips at the peak....but they are 6 months too late. Also, on propertysnake today, the number of listing of drops for Northamptonshire is now as a massive 449 !!!! I think the agents must now be playing hardball with the vendors. The question is now, if these drops do not attract buyers what happens next, stagnation or rapid decline ? It's interesting to watch.
  15. Dont think many flats in Northampton will be selling for over guide price for a long while. They struggle to give away the flats in Wellington house and they are building sooooo many at the mo there might well be a glut of repo's soon. To be fair I think this place has a good chance of selling around the guide price but with the credit crunch and nervous BTLs it's hard to call. Its a good location and they look nice flats. 150K was way too much, £80-90K would be about right. Might be a good judge of where we stand at the moment, so i'll keep an eye on it. EDIT: Actually I think it's already sold !!!! Though the photos look slightly different. It seems the original flat is to be with joint auctioneers. The flat below was to be sold at guide of £145K, but has sold. http://www.howkinsandharrison.co.uk/Proper...urt/175487.aspx
  16. Hmmm, not sure it's decent. Lots of brothels, murders, drugs, polish ghettos, closed shops, violence, rubbish and a general run down feeling round that way now. I've been in Northampton for several years now but I've sold and im leaving the place, it's going to the dogs. I hate to say it but MK is looking sooooo much better, and I used to hate that palce. EDIT - found this little gem...: Is it a 1 or 2 bed flat for £115K? How does that 115K asking look price look in comparison to this 3 bed flat thats been put up for auction, guide price £105: http://www.rightmove.co.uk/viewdetails-194...10&tr_t=buy Original selling price according to land registery: 19 Jul 2004 51 Bedford Road, Northampton, Northamptonshire NN1 5NG Flat (New build) Leasehold £150,000 Good town center location, modern place, not a bad area, good road links. It probably wont even sell !!!!! I'd am tempted to bid but I think it's over priced !!!! As these auction places devalue the market the resale flat prices will eventual drop in line, i.e. 30%, so the £115K flat might eventually be worth about £80k again !!! Anyone sitting in a flat in Northampton are about to loose their shirt.
  17. I've come across several amateur developers in Northampton that have been struggling. I dont think they will be flipping another property anytime soon, which must have an impact on the number of buyers in the area. So I really do see only one way for Northamptonshire house prices, and it's not up !!!!
  18. There's definitely something afoot in Northamptonshire, as of today, 382 reductions listed on property snake !!! This is by far the highest number ive seen and ive been monitoring it for 6 months now !! Maybe the agents have been telling people to drop their prices in readiness for a quick sale in spring.... P.S. Sorry for the double post, didnt realise. Think this is quite significant though !!!!
  19. How come if the CPI is 2.2 and the RPI is 4.1 my cost of living has gone up 10%, if you multiply the CPI and RPI together it's just about right !!!!
  20. Whats that then about 8 times average salary in MK...probably 10 times in Northampton. Very reasonable. EDIT: PS - something is most definitely happening in Northampton, on property snake of as today there are 382 price reductions listed. This is by far the biggest number I have seen. EDIT: PS - Also, more job losses 320 more and in this article it lists another 400 that I never noticed before: http://www.northamptonchron.co.uk/news/Sho...hire.3767850.jp This is terrible news for the area. EDIT: PS, found this little gem, 3 bed flat, good area, originally sold for 150K, going to auction guide price 105K http://auctions.erinaceous.com/images/dirt...tial/312/34.pdf Will be interesting to see what it goes for !!! EDIT: You can tell by the number of edits that there's a lot going on this week EDIT: Propertysnake up to 402 propertys for Northamptonshire today ( 13/2/08) What's going on ???
  21. Yes, the issue is available until they either withdraw it or make a new issue. You can put up 15K in both the 3 and 5 year issue at the moment. Its a very good deal if you are a higher rate tax payer.
  22. HouseDog, spot on with all your comments there. Regarding your comment above, I was thinking that very same thing this morning. There has been just about zero press on housing market in Northampton since last year. I have a funny feeling that they dont like the article posters on their website that point out the facts every time they post a vest interest article. Those comments negate every positive thing that a VI article trys to brainwash the locals into thinking, so maybe they are prefering to stay neutral for now.
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