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longisland

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About longisland

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  1. Had a viewing at papermills a few days ago - estate agent let on that the landlord was desperate to rent and that she knew a lot of people who were in a similar situation. Unfortunately for them, there is such a large oversupply of similar properties on the market right now, I would be amazed if they could ever cover their initial mortgage costs. what was even more shocking, truth be told, was that the internal proportions of the flat we saw at Papermill made it practically uninhabitable - ie huge main living room, and 2 small single bedrooms without any storage space built in.
  2. Indeed - very good point. To coin a phrase, when the facts change, I change. Going into March, I thought falling interest rates would stabilise the UK housing market, but clearly I was wrong and had not factored in extent of the tightening credit crunch. I was prepared to accept a 10% fall in my purchase price (circa 18k), but when confronted with a 8k builders fee based on the survey and the fact that the buyer was refusing to lower his offer by more than 5k, it unfortunately become time for me to bail. As it happens, the cost of my mortgage would have been 4.24% so it would have been very cash positive for me to buy as opposed to rent. However, I am prepared to admit that the chances of the market falling by more than 10% are very real, and that is something I am not prepared to gamble my family's security with. At the end of the day, it was a joint decision between myself and my spouse and she was happy to accept that waiting another 12 months would make a lot more sense. I can argue my position all day on here, but I can't argue with facts and the drop in mortgage approvals really brought home the link between availability / cost of credit in relation to property values. Unfortunately, now that houses are falling, I wonder if the banks will continue to widen their deposit ratios which in turn will lead to faster falls in the market. It is indeed a vicious circle.
  3. ok - just for all you sceptics - an update. Did a comprehensive survey on the property and then got a local reputable builder to quote. 8k of works that were either urgent or imminent. Went back to the vendor saying lets start negotiations again.......at first he offered me some white goods (lol I may look stupid, but I'm not quite that stupid). Then he offered me 3k off and then, finally 5k off. Me thinks 5k off versus 8k costs in a falling market - absolutely no deal. So there we have it - we walked away from the property this week. In anything other than a falling market, the price would have been a steal, but the more I thought about it, the more I realised that the gamble was too great if prices really do have another 10%-15% to fall. What's interesting is that had he offered us 8k off initially when we first started talking about it, we would probably still be in the mindset to proceed. The fact that he refused to negotiate initially at first annoyed us, and then made us start looking for reasons not too buy. So by the time he offered us 5k off, we had almost decided not to proceed regardless. Moral of the story - don't get cute with an interested buyer. Against such a backdrop of negative news, it only takes one annoyance for people to start trying to find reasons not to proceed. pps another deal breaker was the following weblink:- http://www2.standardandpoors.com/portal/si...4835462321.html Click on that, and compare that graph with similar stats from the Nationwide and you'll come to a number of interesting observations - basically things in the US are really really bad (and not very well reported in the national press). Second, lowering interest rates in the face of a credit crunch doesnt really have much impact on property values and third, we could face falls similar to those seen in the US.
  4. longisland

    Cheeky Offer

    REB - congrats from me as well. I know only full well what its like to have a spouse nagging you to buy a nice house - logic just doesnt come into it! As for the Porsche - well, if she is anything like my spouse, she would be saying 'if you can afford to buy a Porsche you can afford too (insert various items here such as house / kitchen / overseas villa / wardrobe). Hope the Porsche hasnt reduced your negotiating position with the spouse too much! Best wishes - Mike
  5. No - I think your money is safe in the bank. But ultimately, if you want a higher return on your investment, you need to take a higher level of risk - which is why people BTL ultimately. No one ever got rich leaving money in the bank, unless your surname is Gates!
  6. Ok, just to add some colour to my original posting. As it happens, my fiancee is from lowestoft which is why we decided to move to norwich. She misses her family (bless her) and also wants to start a family - which makes sense as neither of us have close relatives in the south east. So it wasnt purely a financial move to buy in norwich, it was primarily a move based on family reasons. I just wanted to post on here to show that the maths made sense for me to buy rather than rent. As for my line of work, I sell commercial property to ultra high net worth investors. (ie FSA building in Canary Wharf / ABN Amro building opposite Liverpool Street) so I probably feel the effects of the credit crunch more directly then most on here. I chuckled when someone called me a brain washed automaton - been called many things on here - but never that. SMAC - while I appreciate your undoubted concerns you completely miss the point of my whole post. I simply wanted to point out that for me buying made more sense than renting. If I had come on here saying now is to time to buy / double your money in 5 years etc then I would probably agree with your sentiments about being a brain washed product of a consumerist society. As for commuting, I envy those people who don't have to do it, but for some of us, the financial incentives for doing so very much outweigh the inconvenience. You get 2 types of posters on here - those who are happy to accept that someone may have a different point of view to the majority and those who are so entrenched in their position, they simply try to criticise, ridicule and personalise their attacks against you for taking a different position. If anyone is to labelled as automatons, it should be those who fall in the later category.
  7. When I was looking to rent in Norwich, the estate agents said a lot of demand in the local market was from people being seconded to Norwich Union on 6-12 month contracts. However, that said, the local market is very over supplied with riverside flats that dont appear to be selling. Where individuals have bought them and cant sell, they seem to end up renting. I think you'll start seeing riverside flats appearing at auction reasonably soon (although that said, a lot of estate agents have clients who will happily buy the right BTL flat privately at the moment, which perhaps explains why your not seeing more flats at auction).
  8. Im sorry if I didnt make myself clear - yes for me it was cheaper to buy then to rent. But for a BTL person, he/she would want a greater margin of profitability to take into account void occupancies / agency costs / refurb costs - hence me suggesting interest rates would need to drop another 25 to 50bp.
  9. Well, I chose to work in London so that I am in a position to earn the kind of money that enables me to be able to buy a house in today's climate. Yes, I had a choice when I first moved to the South East of working locally and earning substantially below average earnings. I did it for 2 years, had a 1 minute walk to work and had a lot of free time. However, after 2 years, I realised that I could never earn sufficient income to buy a place I would be happy with. So I made a conscious decision to work in London and yes, that involved 60 hour weeks and 6am starts, but that was a sacrifice I was prepared to make. We all have choices in life. I took a decision to improve my income levels knowing full well that I would have to make sacrifices elsewhere. So I refute the point about me being smug / rich. If I am in a positon to buy a house, its because I made a decision many years ago to change my life style, and only now have a reached a point in my career when I can do so. ps my current season ticket is about 4k a year, so working the maths backwards, I'm still improving my cashflow.
  10. All - Where I seem to differ from most people on here is the fact that i am buying a house to live in, not to speculate. For me its not simply an investment decision. I agree, the commute is not my ideal scenario, but its about 20 mins more each way per day then I do right now, which means I get to read the whole newspaper, not just the sport section. As for the maths, you forget then I rent in the South East right now with associated inflated council tax bills. Moving to Norwich means I'll save approx 400 per month in rent. I could have rented and looked a great many properties. The simple truth was, I didnt like any of them. As for keeping my powder dry - 40% of it still is and with cash in the bank, I'll happy leverage up should house prices really crash. That said, it the housing market does crash, I can see interest rates falling substantially, so cash flow wise, it benefits me. Commuting for me is a means to an end. I work in the City and luckily have a job but doesnt rely on a buoyant stock market. In fives years I hope to be mortgage free, and that's the point I'll look to work locally. Just to finish, I didnt come here for any praise. I just wanted to give a slightly different point of view as to why I felt now was the right time to buy taking into account the wider economy.
  11. You could, if they still did it - its now been withdrawn. However the company concerned was Smile / aka Co-op bank. This is the closest offer they now do - http://www.smile.co.uk/servlet/Satellite?c...View&c=Page I was happy to pay a large intial fee, which no doubt contributed towards the low initial rate of interest - but at a lending rate of 0.76 below base, the maths made a lot of sense.
  12. yep - it was an offset mortgage, so if investment opportunities dont arise elsewhere I'll just nibble the mortgage down a wee bit more :-) jcp - good point about prime locations. Its all very well waiting for properties to fall 10%-20%, but are they the ones that you would necessarily want just because they're cheap? As a property developer / BTL person - perhaps, but as a place to live, bring up the kids, walk the dog etc I doubt it! steth - I might be mad, but for me, it (was/seemed) an entirely rational thing to do. Lets see if I'm still posting here in 6 months :-)
  13. D12 - i know uckfield well. if your a regular london commuter have you ever considered horsham? minimal chav problem during the week, historic market place, reasonably affluent, most EA's per head of population in the country I believe, good mixture of local traders and big high store names. depending on your budget, very nice property for sale on the causeway. also great london commuter links and damn handy for gatwick!
  14. f&l - i would rather not say, but for us, this street was an absolute deal maker.
  15. Telometer - your right, the bank analology perhaps wasnt a good one. However, as someone who works in the City, rightly or wrongly, I feel there are better opportunities. I specialise in smaller cap investments and feel that the current market is throwing up some fantastic opportunities that have been substantially oversold. Have been long the mining / commodity sector for the last few years and feel that there is still a great deal left to be priced in. Think coal stocks offer great value yield wise as they are becoming more mainstream with gas and oil prices rising by the day (all in my humble opinion, do your own research etc etc).
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