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Deleriad

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Everything posted by Deleriad

  1. Those numbers chime with what seems to be the case to me. It does seem like an incredibly risky step to take but there is still a belief out there that property values will outstrip pretty much everything else. Completely anecdotally. My wife is setting up a new business and we had a chat with a potential builder for the shop-fit. Fairly unremarkable chap until we suddenly found out that he owned the best part of 10 properties. As soon as he mentioned them it was like watching an alcoholic taking a drink. His face flushed and he wanted to do nothing else but talk about them and how he wanted more; the love and attention he paid to them; the brilliance of having. Listening to him it was clear that he lived and breathed this stuff 24/7. He didn't have a life, he was addicted to his properties. I suspect a lot of talk on this board sometimes forgets that people are not rational income maximisers. I wouldn't mind betting that, like an addict, this builder ends up being consumed by his addiction but that there'll always be more addicts out there and enough finance from the pushers to keep them coming through the door. It was depressing and scary at the same time. Essentially what this person was doing was feeding his property habit by pushing every last penny of money he could make from (actually pretty good) construction skills. What's more he was massively undercutting the competition just to ensure he had money coming in. (For those interested, we didn't hire him. The property we were looking at wasn't right and when we finally found what we wanted a few months later we went with someone else.) It seems to me that a rational, hard-nosed approached to property investing is more the exception than the rule.
  2. £300 to £350 pcm tends to be the going rate for single rooms for student flats (4-6 bedroom) in the southside area. That's generally students going to Edinburgh University. You can get cheaper but there's usually a reason if it's less than £250. That flat is in prime student land.
  3. Unless I'm missing something, Stirling has appreciated against the dollar by more than 10% over the last year and slightly against the Euro. Assuming most of our imports are priced in or against those currencies or Chinese (which Stirling has also appreciated against) then I don't see how the devaluation effect can exist. That mechanism presumably dropped out 12 months after the major devaluation so unless there's some sort of lagging effect I would have thought that the slight appreciation of Stirling ought to have reduced imported inflation slightly (or more likely had a negligible effect).
  4. I think my brain just exploded. If someone buys that at anything like that price then I'm off to somewhere saner. Looks like that works out something like £3600 per sqm. On Peffermill Road! I suppose on the plus side you get to watch the occasional lorry crash into the railway bridge at Cameron Toll. Always good entertainment value in that.
  5. There seems to be a resurgence of activity on site there. An effing big hole in the ground now which, I take it, is where the new 'affordable' flats are going to be.
  6. Well I have one data point which is that my neighbour sold his house for slightly less than he paid for it in 2003. On the whole, sales in this particular East Midland village are somewhere around 2004 prices. That said, prices didn't go up by much after 2004 there. Peak prices in 2007 seem to be no more than 10-15% over 2004 prices. The mad period was 2001-2002 when prices seemed to go up by around 50%.
  7. That's roughly my experience. My saved list peaked at 75 and is down to around 60. Most weeks around 10-15% of the properties seem to sell so now fewer are selling but almost nothing coming onto it. My personal belief is that factoring out Edinburgh's crazy seasonal spikes that prices may stay within 5% of current for the next 2-3 years. That said, history implies that there will be another crisis of some sort in the next 2-3 years so I'm working on a fractal kind of randomness. Talking nominal values I would say there's a 50% chance of prices being within 5% the current price in Nov 2013, a 45% chance of some crisis that knocks 20% off and a 5% chance of some frankly unguessable +20% rise. What I don't think we'll see is any kind of gentle but sustained rise or fall.
  8. Rightmove's index doesn't measure that. People get awfully mixed up when they see price drops on the bee or propertysnake and wonder why it doesn't reflect the rightmove index. The Rightmove Index measures the prices that houses which are being newly marketed are offered at. Reductions in prices of houses that are already on sale aren't measured. So the index is a reasonable guide to sentiment though that sentiment is a mix of what owners believe they can get and what EAs feel they have to tell owners they can sell for in order to gain the instruction. So the index has got nothing to do with whether or not people with unsold property are dropping their prices. This does mean that you can get perverse cases where people are increasing the initial asking price because they believe that they'll have to take a 10% discount and this shows up on Rightmove as an increase in asking prices. You may also get EAs colluding with this in order to win instructions to sell: in a low volume market some EAs may decide to pile up their inventory in the hope of finding more buyers that way. So the drop on RM measures the difference in price between initial asking prices this month as compared to last month.
  9. That's the gamble. At the figures mentioned I would have considered fixing but I would also be thinking that I have something like 40% in equity so remortgaging to a fixed rate is always going to be an option when the time comes. What no one knows right now is whether we are in for a sustained period of low interest rates, a gradual climb or a spike. I personally would defend myself against a spike but would probably do it by taking the lowest available term tracker with no ERC and switch to a fix when needed. Of course it's all a moot point if he ended up buying the wrong house for him but that's a whole other issue.
  10. These figures look odd to me. He had 70k in the bank and bought a house for 166K with a mortgage of about 100k. The 100k is 5times his salary which is therefore 20k and on that 20k he is supporting a wife and 4 kids. Previously they were paying 600 per month to a rent a place now they are 2,890 per year in mortgage interest (about 240 per month). Even assuming another £60 per month in insurance and maintenance on average then his interest repayments are 1/2 what he was paying in rent. Once you figure in capital repayments his mortgage (100k over 25 years) repayments are about £470. So his monthly outgoings on the most basic level have gone down by about £100 per month. He may have had other new expenses but the shift from renting to paying a mortgage has seen him swap from paying £600 per month to a landlord to 240 per month to the bank. Obviously, house prices may fall significantly in which case he would have been better off waiting and he's lost the interest and/or any return on his shares. But on the figures in front of me, he seems to have smaller monthly outgoings now than he did while renting.
  11. Except of course that there's a population of what 7 million? in London and perhaps 100K of them working in finance. The other 6.9 million have to live and work on salaries not that much different from what you would earn in Edinburgh doing the same job. In Edinburgh it is still possible to be earning less than the higher rate of tax, live in a nice part of town and have enough disposable income to enjoy a good quality of life. It is almost impossible to buy anywhere in those areas because current owners are sitting on their properties but at least the rent is ok. In London, no deal.
  12. I did include Merchiston in my list of the three possibilities. For example parts of Chingford were remarkably upmarket. Bromley is pretty Oxgangs like from my memory. The likes of Prestonpans are not a bad comparison. Large swathes of South London in particular are small, run-down terraces. I know people who commute from Prestonpans etc to work in Edinburgh because they can't afford to bring up families in Edinburgh. London is a lot like that only magnified. I know Niddrie pretty well. It's not as bad as it was but as a student in the 80s I used to play football at the sports stadium there. Once a week I cycled from Cameron Toll where I lived into Niddrie. Once a week I cycled back and felt glad to be still alive. I like London but Greater London is essentially its own country. I would have to be earning 3 times my current wage to enjoy the same quality of life as I do in Edinburgh. Right now I rent a nice terrace with back garden and driveway for less than 800pcm. It takes me 20 minutes to walk to my work; 30 minutes to the city centre and I have numerous theatres, cinemas and restaurants within walking distance. Edinburgh is by no means cheap. You can't compare it directly to London because the scale is just so different but London is in a different league when it comes to house prices.
  13. I lived in Bromley once. I do my best to forget about it. The nearest equivalent to Bromley and so on in an Edinburgh context would be a village some 10 to 15 miles outside of Edinburgh. Maybe Prestonpans or some such. I worked in London for about 2 years (lived in a mix of Chingford, Walthamstow and Bromley) and it's a completely different world to Edinburgh. If you imagined an Edinburgh where no one but the hyper rich lived within 2 miles of the city centre and all the rest lived in places that consisted of copies of either Niddrie, Oxgangs or Merchiston scattered in random lumps within 10 miles of Edinburgh proper, then you've got London.
  14. Looking at the first flat compared to the first 3-bed semi one, the net internal area of the house seems to be around 55sq m (63 or so counting the attic) compared to around 90sq m for the flat, so we're talking about getting on for twice the area. The flat, (5/1) was ought off-plan in May 2003 for £200,000. Flat 1/2 which is likely to be broadly similar was bought for £211K in June 2003 and sold for £265K in Nov 2009. I would be surprised therefore if 5/1 sold for more than £270k. So the situation might not be as cut and dried as a simple room count would show.
  15. Well there are all the newish (2000-02) flats on Littlejohn Road in Greenbank. From looking at schedules there are quite a few which are the size of genuine 3-bedders in Merchiston if not bigger and they have garages. According to Our Property they seem to sell in the range of £330k. So that gives an idea of the premium that Merchiston attracts compared to Greenbank and the relative prices of bungalows vs flats.
  16. Interesting just had a flurry of price drops and changes on my ESPC watch list. To be precise 9 changes out of a list of 62 in 3 days. That's the most I've seen in a long time. A lot of them are really marketing rather than genuine drops. But there's been nothing like this in my records since mid-November 2008, just after the market peaked in summer 2008. what I mean by marketing rather than a genuine reduction: 41/1 Colinton Road has changed from Fixed Price 335,000 to In The Region Of 340,000. Still, where marketing leads, price drops are soon to follow.
  17. Well their data tells you what actually sold but isn't differentiated. Look at Edinburgh City in August for example: year sold average price 2010 831 £235,088 2009 727 £208,762 2008 764 £228,916 2007 1,771 £225,116 2006 1,937 £198,339 From that it's clear that volumes have nose-dived yet, apparently, this year prices went up. Without knowing what the proportion of types of property sold in 2010 is compared to 2006 we don't know why prices have gone up. Is it because fewer lower priced houses are selling or has there been general house price inflation? One argument is that in 2006 and 2007 you had a lot of volume at the low end among FTBers and BTLers who now don't have access to credit. There are so many potential factors that could be at play that the data as presented offers more questions than answers. For example, is the rise in volume and average prices between 2009-2010 going to continue or was it a dead cat bounce? Normally, reduced volume would lead to reduced prices yet from 2007 to 2008 volume shrunk by more than half while average prices went up. As another example, in August 2003, the stats were 1,581 sold at an average price of £151,969. A friend in the East Midlands has just sold his house for slightly less than what he paid for it in August 2003. For the same thing to happen in Edinburgh you're talking about 30%+ drop in prices.
  18. I thought her post was really useful. The bottom line is that actual, real numbers are useful. The poster's information helps illustrate a useful piece of data: what happens when people on London wages look to move out of London. There is a cohort of people for whom Edinburgh looks cheap and who have the desire and capital to move here. It helps illustrate where demand for Edinburgh properties can come from. Sticking our collective fingers in our ears and refusing to consider data really doesn't help. So for what it's worth I didn't think it was boastful at all, just useful.
  19. Well 41/4 Colinton Road sold for £341,000 in April 2010. 41/1 is on the market for £340,000 and 41/5 is on the marker for £335,000. Given those figures, if either of them sell, it'll probably be for around £320,000- £340,000 I would guess. According to Bee 41/5 it's been on since August 19th with no prices chances so there's a chance it simply won't sell while 41/1 is brand new. Both priced at around £3200 per sq metre. The price history for what is either 41/1 or 41/2 seems to be: 02-Jun-2006 £299,000 25-Jul-2003 £215,000 [edit] they seem to have fixed the Chrome issue at last so no more need for html...
  20. Though interesting to see that they were originally marketing it at significantly over the Home Report valuation. i.e. it appears that the home report valuation is 305k but they were originally offering it at offers over 340K. The bee record implies to me that there has been argument over the pricing. Assuming it sells, it'll be interesting to see if it sells for more than the HR valuation. edit. Scratch that. The entry text hadn't been updated properly. It appears that the HR valuation is actually 340K. Looks like the sellers are figuring someone will bid within 10K of the HR valuation. Definitely one to watch.
  21. My search, which is probably pretty similar to yours had been static all summer with properties added roughly in balance with properties being removed. However the turnover is gradually throttling down.
  22. I'm not convinced that FTBs are that relevant to the popular parts of Edinburgh. For example, I'm becoming increasingly convinced that 1 bed flat in Gorgie has almost nothing to do with the price of a 2 bed flat in Marchmont/Bruntsfield/Morningside etc. I see very little sign of a property 'ladder' from Gorgie to Morningside. New entrants to Morningside seem more likely to come from very different parts of Edinburgh or from outside of it entirely. Edinburgh is clearly not a single, homogeneous market so I can well believe that prices in some parts could fall quite dramatically while simultaneously rising in others. <br >I've read recently that only 35% of all properties on sale actually get bought. An awful lot higher percentage than that get bought in M/B/M judging by the ones I've been tracking and where they've turned up on Our Property they seem to be selling at pretty close to 2008 peak prices. Of course things may change: Edinburgh peaked after most of the UK and cuts will be later here than most places but I'm not seeing any sign of systematic, significant price drops. It is possible that everything's cracking below the surface and it'll get there in the end. Personally I'm renting in Edinburgh and would not buy the properties on offer in the places I want to be at the prices being asked for. Sadly it looks like others will. My judgement of what is a fair price is not the same as the norm and the demand (desire plus ability to pay) is clearly there.
  23. My main savings are in the ISAs, especially the 5% one. Personally I'm paying 20% tax. The "rewards" are £5 per month after 20% tax (i.e. £6.20). Considering my personal CPI my savings are coming out on top by a little bit. E.g. I don't have a car and have no interest in one as I live in a city, have had a fixed rate gas/elec tariff for 2 years, etc etc
  24. Newcastle BS 5 yr fixed rate ISA at 5%. 30 day notice to withdraw or transfer, no loss of interest. Expires July 2014. Santander base rate +3% tracker ISA. Expires march 2011 Barclays regular saver 4.17%. (That's what I use to save for holidays and presents each year.) IF instant access savings 2.5% (for everyday use. Whenever it exceeds its upper cap the excess goes into current ISA) AA 18 month fixed rate bond 4.02%. Expires Dec 2010. Two Halifax reward accounts. Pay £10 per month 'reward' for washing my salary through there once per month. (I use a different current account for everyday banking). As I keep precisely £1in each account (the rewards get paid into my regular saver) that works out at 6000% APR before tax per account. edited because a) Chrome doesn't work properly here and I forgot the last two accounts
  25. This is pretty much the same for me, looking at Morningside/Marchmont/Bruntsfield. New supply has suddenly dried up and a lot of the lower priced 2 bedders in the student areas have suddenly disappeared. That looks like people buying to let or buying or for their kids in time for Autumn. Prices seem to be roughly around the 2008 peak though it'll be interesting to see what the actual sold prices are. Looks to me as though there will be no significant decline in the areas I'm interested in. I guess there's enough external money being sucked in to keep prices where they are. The flat I was renting (1.5 beds, ground floor morningside) and which was on the market for £170k because they couldn't get anyone to pay 700pcm appears to have sold. If that's gone to a btler it implies that Edinburgh btlers are prepared to invest for gross yields of less than 5%.
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