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Crunchie

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  1. Thank Si1, and sorry for being a bit harsh there. The rental for new build flats there is £700-£750, although older flats are around £600 per month. At 2.5% interest at the moment, it will be cheaper to own, and i have bought at over 50% reduction in value from there peak so value wise it's OK to I feel.
  2. Well Nick, I might think people like Si1 might not agree with me, but i have just bought a nice large 2 bed flat in the centre of town. This block of flats started to be built in 2004 next to Aylesbury Station. There is another block of flats in front of me to block off the station noise. In 2006 the asking price for a 2 bed flat (which is very large, much bigger than my 2 bed house), was up to £250,000. Even last summer they were still going for £180,000. They were asking £171,000 I sold my house for 159k, which i bought for 162k in 2006. They still had 12 "apartments" left. So i put in an offer of 120k on the flat which is also carpetted etc and it got accepted as I was in a position to buy pretty quickly as my mortgage would be less than my original one and already sold. I complete tomorrow. If you want a flat (which i did as i work away alot and then don't have to bloody gardening on Sundays ) then there are real bargains out there, and I kept my morgage going which is a tracker at 0.49% above BOE base rate, so much cheaper than renting! If prices drop by 50% from their peak, I am covered. I think Si1 will only buy again when prices starts to increase again (like everyone else) rather than go for bargains. I've got lucky, and you can sting those flat developers who once thought of ripping us off! Barter hard Nick! If you have a mortgage and can complete quickly, they will bit yer hands off at the moment.
  3. My offer on the flat was accepted today at £120k. The flat is bigger than my two bed terraced (and much newer) that i have sold for 159k. Very happy
  4. Thanks athom I have put in an offer today on a new build 2 bed apartment very near the station, fully fitted kitchen and carpeted throughout. It is a very large 2 bed compared to your average size. They are very well built too after seeing it. They wanted £171k. I have put in a £120k offer with mortgage approved and they are thinking about it. They only have 5 apartments left (probably as they are accepting reduced offers) and is the type of flat that was asking 200k two years ago. The last transaction available on the website for the same type of property was £172,500 in June 2008 . I have a feeling they need to get rid to continue with their other development nearby. Your right, with regards to the houses on offer, they are pretty poor quality to be honest, however the going rent on this property is £750 per month. I think the value of these flats when they bottom out could be as low as £120k, so i think its worth the gamble mate. I will let you know if it is accepted.
  5. If they are so desperate to sell and raise capital, why not put in an offer of 30-40% under asking price. They can only say no. It just goes to show that why there are so many 50% owner schemes out there so at least they can get some money in quickly. If like in the film the builder looked longer term and build more homes for rent, they would be les depend on quick return, there would be less buy to letters and the boom and bust of property prices wouldn't be so bad.
  6. I have seen it now, thanks for that it was very informative. It just shows to me why everyone wants to eventually buy a property and not rent, as spending £2000 pounds on a floor and then not getting any leasing gaurentees and you could be "booted out" in 2 months notice shows why eveyone wants security. Purpose build rental flats/houses will help. As in term of investments its just like stocks and shares. Personally i would buy banks shares like HBOS at the moment, as even though their is a risk off them going to the wall and loosing all your money, it is much more likely they will gain3-4 times their vaules in 5 years time. It's just of case of sitting back and not panickng. BTW i wont be in negative equity of £19,000 if i think that a 50% drop happens, which i think is an overestimate, but i will loose £19,000 of its value. I would also loose £18,000 if i rent. However if i choose a repayment mortage i would have paid of 2 years of my mortgage in the mean time and don't have to answer to a landlord or risk a poor one. I also have to take into account that as my new mortgage i got in 2006 (i did originally buy in 2002 BTW) is redeemed before Sept 2009 i also have to pay an extra £4000 as an early mortgage payment penalty. But your right, i wanted to sell my house at a good price so i can to weigh up my options, which i am in a fortunate position to do. I think there will be more repossessions in the future at maybe even cheaper prices, but if my mortgage payments double because i waited 6 months (because have to get a new mortgage) and also pay 4k redemption i would loose out much more, than to try an wait to get another 10k off the value of a flat in a another future repossession. I just think your more bearish than me mate.
  7. Doesn't means he is right though does it? I have never heard of him. Oil is nearer $50 a barrel now rather than the $100 a barrel in Jan, so that will stop the recession getting way out of control for a longer period of time. Once the credit markets recover which will take a year or two, sensible lending will return, and hopefully (but i doubt) we will learn our lessons and the boom and bust will not be as bad. I just hope small businesses (like mine) can survive and can get short term investment, and unemployment doesn't get out of control. Thats the biggest risk at the moment to how bad the recession will be. I am sure you have heard of the Fred Harrison's 18 year land and house pricing circle and it will happen again. It just depends how severe the boom and bust will be next time or and hope it's not as bad as this time as housing was 40% overvalued IMO.
  8. I agree with this. I am seeing two repossessed flats that are less than 24 months old next to a mainline station tomorrow. One is at £115k (and was bought for £182k in Jan 07) and one slightly larger one at £125k (bought for 212k in Feb 07) in the same block in the town centre. That is a 36% and 41% drop respectively, which are close to the overall predicted falls overall from 2008-2010, where things will probably bottom out. However a very important point athom is my tracker mortgage. The mortgage will not be anywhere as competitive in 2010 or even 2012 than the one i have now in my opinion and even if i was interest only it would be much cheaper at 3.5% interest rate than renting. If fact my monthly payments would be about £320 on interest only and the same flats get rented out for £700-£750 a month. Even if flats dropped 50% overall I would be ok. 2 years rent at £750 is £18000. The £125k flat would be worth £106k (50% of £212k), so i would loose £19000, and paid £8k in mortgage interest, so paying £27000. However interest rates will go down further and thus I won't pay so much in the mortage, more like 5k. This is absolutely worst case IMO and i would loose 5k instead of renting but things would pick up again after 2010. However i don't it would be as bad as that and a 35-40% drop from peak summer 07 values is realistic, then I may even save money from renting. I am hoping that I would have already have adjusted for the 2009 drop in house prices by buying 40% below peak values and I would still have a flat at the end of the day.
  9. I have accepted his offer today of 159k (asking price of 165k (down from 175k in Summer 07), as a gamble as i will not be in Aylesbury for another 6-12 months and prices going down anyway. I think if prices drop another 25% until 2010 (which is my current guess) then i hope the asking price of a similar property will be around 2010 of £125k and i would have been in negative equity obviously if that happened. My only disappointment is that i will have to pay on 3% redemption on a very good mortgage of only 0.49% above BoE for the lifetime of the mortgage. Maybe i should look into buying a cheap empty flat to rent from someone desperate to sell for a low price as i can keep this mortgage going if i rebuy at a low price, plus i can have 90 days grace between selling and buying before i have to pay my redemption? If i do buy a new property cheaper then i sell, then I only have to pay the 3% difference in redemption.
  10. He could be right, but i honest think his original call of 35% is correct. I see a 50% drop a touch too far, as banks in UK will have sorted themselves out by sometime in 2010, and will be able to offer better but more sensible deals. Once a 35% reach has occured i think thats when the correction is made in affordablility to the first time buyer, and this time i hope the bubble and bust is over for good. I think a 5% drop per quarter is about right IMO until 2010 after what i have read in recent days. Just depends if there is any overcorrection
  11. Hi Jim Sorry which programme was that? I did see the Panorama and C4 program last night both were pretty bleak, but can't remember any quotes like a 15-20% next year? Was that off the tonight programme? Panorama did quote that not only first time buyers can't get a mortgage, but the current homeowners that have cheap fix rate mortgages coming to an end, will often see their mortgages rise by 33-50% and they will rarely be able to get a better deal elsewhere, thus resulting in more sellers wanting to rent. That was worrying Plus the americans cant seem to agree whether a 700bn bail out with tax money is a good idea, rather than the government buying into stake into these firms and then slowly sort out their messes, but that would gaurentee a recession in the US and probably over here too.
  12. Thanks for your opinion it is very much appreciated If prices only went down say 10% over the next couple of years, then i would hang on, and re-rent the house, but if it say went down another 20% or more, then i can quite happly sell to the buyer. Its trying to second guess how much value to the property we lose before it bottoms out. I have to give the estate agent my decision tomorrow as the potential purchaser has put in his final offer and wants an answer (he has offered 153k and went up to 159k). It is a difficult one.
  13. Hi All. First post here (great forum), and I hope you dont mind me starting one but thought the question was just slightly different to should I buy or rent. My situation is this. I am working away in Devon and my house in Buckinghamshire is now empty (as tenants have just moved out). I probably wont be back to Bucks for another 6-12 months. I have a cracking mortgage (0.49% tracker above BOE Interest rate) but also have an early redemption charge to pay of £4k before Sept 2009. However I have just had an offer on the house only 3k less than I bought it for in Aug 2006. (It is a two bed terraced). Now I know this game is all about opinions, but I was wondering how much the US interventention as well as the Europeans and the Bank of England pumping another 50 billion into the system, will effect how much Banks will be willing to lend to each other again in the near future and effecting house prices? Is it still worth selling as prices will continue to fall at the same rate for the next year (or two) as a recession seems brewing, or will the property prices just stagnate and the market will just carry on being really quiet until the property price correction is made through inflation, as banks will start to lend to each other again? I understand banks will be much more sensible in the future when it comes to mortgages, so basic salaries will need to higher to purchase my house, than it was before I bought it, but there are people viewing my house now and they all seem to be on 50% share schemed mortgages, paid by the housing association etc, so will these buyers keep the price stable until the credit crunch resides? The bottom line for me is if i sell my house now, when i return to Bucks i could rent for a year or so and then rebuy later (in 2010), thus saving myself a bit of cash. I only need another 15% drop then i am in negative equity. Or if prices just stagnate (or decline slightly) for a couple of years, then obviously would be better of just re-renting my house out as my mortgage deal I have is very good. I don't know what to do so any advice would be greatly appreciated.
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