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Posts posted by smilie

  1. House madness

    I bought in HOP last May. Initially was looking in East Dulwich, but prices are crazy there. I think HOP and Forest Hill have a lot of potential. Its quiet and very residential, and bars & restaurants are slowly getting better. I think the overground in 2 years will give the area a big boost. So far I havent noticed any softening of prices, although properties are taking longer to sell.

    Anyhow, good luck!

  2. This house isnt your run of the mill ex local authority house - its a grade 2 listed georgian terrace. It never crossed my mind when I put the offer in that my neighbours would be council tenants...but it is a major concern about what any future tenants may be like.

    I dont mind the area - i live there now. Its very convenient. But prices are now getting close to much nicer areas like kennington which to me doesnt make sense.

    At the mo I'm very cash rich - i prob have enough money in the bank to have 2 years off if i wanted. I was thinking I could try a new direction career wise. Maybe thats more important about life rather than struggling to afford a nice house in a career that I hate...(although i'm 30 so thinking i could be too old for a career change now). I'm currently an accountant btw.

  3. Well....I am in the process of buying a house in Elephant & Castle area....its a lovely house but am really concerned now that I am overpaying for it.

    Here's the story...

    I am paying the full asking price. There were 2 other offers at full asking at the time, but i was in the best position so I got it.

    But I have learnt a few things which make me uneasy:

    Firstly the vendor only bought the house recently - he completed on 29 September 2006. I am guessing that he had his offer accepted in June. I now know what price he paid for it (its now on nethouseprices.com). He will have made a 10% gain if the house goes through at my offer! Thats a 10% gain in just 5months.

    The agent says that prices have risen sharply in the area. But by this much?

    Secondly I didnt know this when I put the offer in but the house is ex localauthority and both my neighbours would be council tenants. They may be fine now, but what if they change in the future?

    And thirdly my survey has revealed a few problems. Nothing too serious, but enough in my view to take off £5k off the price.

    Anyway, I sent all these concerns to the vendor via the estate agent, and surprise surprise the vendor is not willing to budge on the price (I suggested a 4% reduction), and believes that he will be able to get an even higher price if he puts it back on the market. He may well be right as houses seem to be flying off the shelves.

    So not sure what to do....

    I'm starting to think that there is no discount any more in buying in elephant & castle ie all the prices already reflect the future regeneration plans. I really feel like I am overpaying for it.

    I'm also starting to question whether in fact I should tie myself down to such a big mortgage (4.4 times current income). I am half thinking of changing career. Buying this house could make this impossible....

    I have also spent quite a lot on the survey, valuation, and other fees so this is going to be an expensive lesson if I walk away now.

    Perhaps I've been reading this forum too much! Its scary reading....

  4. 4.4 x salary buying into a traffic gridlocked , crime ridden cess pit , yards from the Old Kent road , Brixton , Stockwell , Deptford Vauxhall all in walking distance , sounds nice , be careful when your out is the advice :ph34r:

    " In the absence of an economic shock " etc. ...............another worthless opininon .

    " Regeneration of the area " problem is it will still be the same type of people living in the area , it's the people that need regenerating not the area .

    Olympics 2012 , wtf has the this white elephant of 2012 got to do with house prices , the olympics will be just a huge waste of taxpayers money .

    For your information I have lived in Elephant & Castle for the past 4 and a half years and never had any problems.

    Yes some of the new housing will be to rehouse existing council tenants in the Heygate estate:

    "The council will be working with its housing association partners to build 1,000 new homes for Heygate tenants on 14 different sites grouped into four areas around Elephant and Castle." (from council website)

    Total plans include:

    5,300 new homes

    75,000 metres of new shopping space

    five new open spaces

    a series of landmark buildings

    a new civic square

    more than 4,000 new jobs

    improvements to transport links, including a new station, upgraded tube connections, new bus and cycle lanes and better facilities for pedestrians

    Therefore 4,300 of the new homes (ie the vast majority) will not be from existing residents. And there is a lot more changing as well as you can see.

    Why is my opinion "worthless" - ie why is your opinion any better than anyone else's?

    And my point about the Olympics is that London (more than most capital cities) will be in the world spot light, and will encourage more and more foreign investors to buy property in London. This is happening right now.

  5. Well I'm not convinced of a crash either, hence I'm in the process of buying right now. Am borrowing about 4.4 times salary.

    As I've said in a previous post, I am buying in Elephant & Castle in London. The market is very strong here. Houses are being snapped up because of the regeneration of the area.

    In the absence of an economic shock, prices rises are likely to slow down, or become flat for a while. Although in London prices could keep climbing as we near the 2012 Olympics.

    As David Smith says in today's Times:

    "PS: Two years ago, in the autumn of 2004, the Daily Express ran a front page with a warning from David Miles, Morgan Stanley’s chief economist, that house prices could fall by up to 25%.

    Last week, the Financial Times also led on Miles’s prediction of a housing bust, admittedly on the basis of some new research. I don’t know whether that says more about the Express or the FT.

    The debate about whether house prices will crash is older than the hills. I have long taken the view that the market will not implode unless there is a serious economic accident, defined by a loss of control of monetary policy by the Bank of England — a very sharp rise in interest rates — and a big rise in unemployment.

    The minutes last week of the Bank’s November meeting showed that even one of the deputy governors, Rachel Lomax, did not support the rise in Bank rate to 5%, suggesting no great pressure for big (or indeed any) hikes from here. Unemployment is up, but employment is also rising strongly, so it doesn’t really count.

    Miles, a noted technical economist, has assembled a model that suggests between a third and a half of the rise in house prices over the past decade is due to speculation. People, he argues, have been drawn in by the expectation that prices will rise by 10% a year. When such hopes are dashed, prices will tumble.

    Expectations are important.

    The problem is that we have no information about what housebuyers expect to happen to prices and never have done Experts differ. Another top-notch technical economist, Steve Nickell, formerly of the Bank’s monetary policy committee, took the same data and concluded that house prices were not overvalued.

    It is important to recognise too that Miles is predicting something that has never happened before in the UK — a housing-market crash driven by the reversal of speculative expectations. Every previous crash has been driven by real factors — unemployment, recession, higher interest rates and so on.

    My view is that this is still the case, with support for prices provided rising population and limited housing supply.

    Miles suggests that prices may well continue to rise for a year or two but “falling real house prices at some point are likely, but timing is very difficult to predict” and that prices could fall without damaging the economy much.

    I don’t dispute that prices could fall but it will require the economy to hit the buffers. We’ve never had a housing crash in the absence of a recession. I don’t think we’re about to break the habit. "

  6. IMO house prices were about 'right' in 2001. Add on 2-3% for every year of inflation since then and voila, you have a reasonable price for the property.

    Of course, it's not always possible to get a 2001 price so the theory has it's faults I must admit!

    Well actually I have some data from nethouseprices.com

    An identical house 2 doors along sold for 25% less than the price I am paying now about 5 years ago (or in other words, the price of that property 2 doors along has increased by 33% within the same time frame if its now the same value of the price I am now paying).

    Which means that I am overpaying by about 20% then!

    Only thing in my favour is that the house I'm buying has been refurbished to a reasonable standard which the other house may not have been.

  7. Hello

    Thanks for all your reponses....its been interesting reading what you had to say.

    I merely wanted to compare rental value to purchase price to get some indictation as to how much I may be overpaying. I think that the gross yield only comes in at about 4% which isnt very high I know. But maybe comparing rental isnt always the best comparison you can make. What I am buying is a quality 2 bed period property. I know for the same money I could buy an ex council 4 bed - this would give a much better yield, but that doesnt mean that the period property has further to fall does it?

    Or my question in another way - isnt it always better to buy quality in the best possible location (nowithstanding the fact that this is elephant & castle!)

    I am starting to get stressed out by it all. I think I will pay for the valuation and a full structural survey and see what that comes back with....if this says that it is overvalued, I may try and negogiate a lower price - although I know that is a forlorn hope....I was one of 3 buyers who offered the full asking price within a week of it going on the market - I was the stronger of the 3 so I got it.

  8. Hello all

    I have decided to take the plunge and am in the process of buying a small house in London.

    I know that most of you must think I'm mad buying at this time, but I am buying because I really like the property in question, and its also in a regeneration area (Elephant & Castle) so hope that I'm at least protected from any downturn in prices.

    Currently prices are going crazy in this area and most properties are not hanging around, so I decided to go for it even though I will be stretching myself a bit.

    I read somewhere on this forum that a good way to compare how much a price is overvalued is to compare the rental you could get versus the interest you would be paying on an interest only mortgage. If the mortgage (I am assuming an 85% normal BTL one) would be covered by the rental, doesnt this show that the price is fair? (I think in my case the mortgage paytments on this basis would just about equal any rental I could get).

  9. Hello

    I never post on here because up until now I didn't really believe that a HPC was going to happen. But now I'm not so sure.

    I am looking to move from my current house which I own and have a fairly low mortgage amount to pay off.

    I viewed my dream house the other day, and couldn’t resist putting an offer in for it. I offered about 95% of the asking price. But of course 2 other parties went straight in at the asking price. I refused to go higher…..but now I’m starting to regret my decision as there are so few quality houses on the market in my area.

    It looks like the person who has got it is a buy to let investor. But I can’t for the life of me understand how he has managed to get a mortgage because at best the rental income will equal the interest on a typical BTL 85% interest only mortgage (from my calculations). How can this make financial sense?

    Thinking now that I should have gone over the asking price to get it (although it would have meant stretching myself a lot financially)….although my other plan is to wait for a year or too and start looking at auctions and maybe then picking up a repossessed property at a discounted price? That of course is dependent on some kind of crash taking place….

  10. Totally agree with Baro

    Coastal resorts - Absolutely overcrowded with poor apartments none existing rental yields - Dumping occuring.

    Golf Resorts - Impossible market to determine as does not exist except on paper - Short season and will be impacted by coastal resort problems and Spain has the upper hand (but still oversupplied).

    Ski Resorts - Only one decent resort Bansko - massive over supply, none existent rental yields.

    Infrastucture as stated is very poor.

    Many people investing are investing blind and the shake out will go on for years to come.

    Perhaps would consider investing in the cities for rental potential combined with capital gains.

    You would seriously have to know exactly what you were doing to make money in Bulgaria.

    I think Bulgaria still has lots of potential despite the boom it has had over the last couple of years.

    Opodo has just put Bulgaria top of its list of ‘Top 10’ up and coming travel destinations for 2007.

    BA is now flying all year round to Varna on the Black Sea, and is now selling return flights for £59 inc taxes. With other budget airlines predicted to start flying to Bulgaria, there are likely to be more and more independent travellers which will improve rental returns.

    EU membership is guaranteed which will continue to improve the infrastructure of the country.

    And I think that golf does have lots of potential - there can easily be a 9 month golf season on the coast. Why are 3 professional golf courses being built around Balchik north of Varna?

  11. But what if we count all the developments in Europe on the sea, we are talking massive over supply. Your rent in Morroco will have to compete with other rental places across Europe. I have seen this happen with an appartment my parents owned in Switzerland, to start with we had 26 weeks rent out of an all year round destination 10 years later it was only 6 weeks. The appartment was sold 15 years later with a loss.

    I believe we are looking at a ********** and an even bigger crash in overseas holiday homes. I do not think Morroco will be spared. 3 countries arround the world have not gone mad in House price mania. Hong Kong, Germany & Japan, these will be spared. Good 8% yielders are available in Japan with 2% mortgages

    However now people start to understand that bulgaria is over (this happened in a time frame of 3 years, spain took 25 years) all the agents move to market Morroco is the latest destination to make money. You can see the cycles are getting shorter, based upon the shortening of the cycles I expect Morroco to peak in 1-2 years. I'll bet it is a good destination now to buy and sell offplan.

    I don't altogether agree that "Bulgaria is over". The Sunday Times article had a few home truths (weak rental demand and risk of oversupply), but it was very biased - it did not mention the positive impact EU membership is and will have, as well as when budget airlines start flying there (which is inevitable) - then independent travellers are more likely to visit which will help demand.

    And even if rental demand remains weak (France and Spain holiday homes are classic examples of how widespread this is), I think there is less of a risk of a crash in Bulgaria because prices are still low. I am quite happy to keep the beach apartment I have in Bulgaria as a holiday home for my own personal use. But if I owned the same apartment in Spain (and costing 3 or 4 times more), then I would have to try and get rentals as I'd probably have to get a mortgage to pay for it. In Morocco, prices are higher than Bulgaria, even though its people are poorer. It also does not have the certainty of inward investment like Bulgaria has. So for me the risks of buying in Morocco are far greater.

  12. I reserved earlier this year on a first phase. Since then the exact same properties being released on the third phase are considerably more than I paid. If I was to sell my contract now I would obtain the third phase price point. Once the third phase is sold and once the properties are built demand will drive prices.

    Hi Dogbox

    Congratulations on making a huge paper profit.

    One point the programme made clear was that the French and Spanish have been buying in Morocco for years - its only us Brits that have recently started buying.

    As you know I have bought in Bulgaria. It was interesting to compare the programme last night to the one the same presenter did last week on a couple of British property developers in Bulgaria. All the same arguments you guys keep making about the prospects for Morocco can equally be said about Bulgaria (prospects for tourism, increased investment etc etc). Yep it has a shorter season, but Morocco has the terrorism threat and what would worry me most is that its not a democracy. What safeguards do you really have for the future?

  13. I thought the programme was hilarious! Did not put Morocco in a good light at all.

    The properties the presenter selected seemed really expensive to me for what they were. And yep it was very revealing that none of them had sold.

    And most of the coastal off plan developments seemed a long way from the coast so are bound to lose their views as more development takes over. The Playa Vista one was first line - but looked a huge development. The so called price increases of the off plan developments highlighted are just the developer increasing his prices as the development is sold off (ie not real increases). The developments also all seemed to be in the middle of no where.

    And the Marakesh development he decided to buy (3 bed villa), although it looked nice was miles away from the centre and was £165k! Hardly cheap for such a poor country! On what basis are prices going to increase dramatically above this? And how can locals afford these prices?

    With the King deciding that he wants all these millions of tourists to visit in years to come there are going to be thousands of apartments built by the sounds of it. The oversupply problems and difficulites in selling on to realise these wonderful paper profits (what has happened in Spain and now happening in Bulgaria - I should know as I have bought there!) seems inevitable.

  14. Hi mpd

    Bulgaria's entry into the EU may be delayed by one year but thats it. It will definitely be joining.

    And yes - organised crime is a huge problem in Bulgaria. Its the EU's main concern. WHich is why loads of emphasis is being placed on it to get things changed. I'm sure it will take many years to fix, but I think you have to get it into context. Corruption is rife in many countries. Just look at this world ranking of corruption by country:


    Bulgaria is ranked 47th. Compare this to Italy at 32, and Czech Republic at 39. Poland is ranked at 59 and Morocco (for comparison) is 67th.

    I never said you can compare Bulgaria to the likes of Czech Republic or the Baltic States. They are significantly more advanced.

    And yes - lots of young Bulgarians want to leave (at least temporaily) to earn a decent living. The same can also be said with boat loads of Moroccans arriving in Spain trying to escape the extremes of poverty there.

    At least Bulgaria is a newly established democracy (with teething problems I agree). This fares better for the future than an absolute monarch in Morocco.

  15. Sounds too good to be true to me. I just don't buy it. I'm not saying that you shouldnt invest in Morocco and have a nice holiday home, but to expect the kind of returns you are stating is way over the top. It is all hype probably taken from the sales brochure for the development you are talking about.

    You cannot compare what has happened in Dubai to what might happen in Morocco. Again look at the facts. The GDP per capita in the United Arab Emirates is $29,100 (about the same as Germany) ie about 7 times more wealthy than Morocco.

    In the next 6 years, 12billion euros is to be invested into Bulgaria by the EU to improve infrastructure. Many other foreign companies are investing there too as well as the US which is investing because of military bases being planned in the country. There is far more Foreign Direct Investment (FDI) pouring into Bulgaria than Morocco. Although I could only find 2003 figures for this, Bulgaria was ranked 23rd in the world, with Morocco ranked at 32. In other words Bulgaria will become more wealthy far more quickly than Morocco.

    You say it will be a magnet for the rich and famous. Yet you then say that Ryanair and Easyjet are going to fly there. This latter development is evidence that it will attract budget conscious travellers - the sort of people that will certainly not want to pay £4000 (or even £1000) per week to stay in your villa having paid for their £50 rtn flight with easyjet.

    And yes, the resale market in Bulgaria is very underdeveloped. But it is no difference to Morocco - everyone is going to want off plan because there will be so many developments. So dont bank on making that £1m in 10 years just yet!

    Have you actually visited Morocco? (I havent) There are deluxe golf developments springing up everywhere - Turkey, Cyprus, Bulgaria, Cape Verde, probably even Egypt I expect (which seems very similar to me to Morocco). So lots of supply....it will be interesting to see if any of these countries do actually make the grade and establish themselves properly in the golf market. But I think its fair enough to assume that professional golfers will always prefer the courses in Spain and Portugal, and these other destinations will always be second choice.

  16. Hi Dogbox

    I think you are being very optimistic that you will achieve £4000 a week in rent! I think you mean £400 a week, but even this could prove ambitious. How do you base this figure on?

    I agree that Morocco is a year round destination - but you could argue that summer temperatures in July and August are too hot, especially to play golf in.

    Morocco is a significantly poorer country than Bulgaria (GDP per capita is about $9000 for Bulgaria, but only $4300 in Morocco - thats poorer than Albania!). Bulgaria is yet to have proper budget airlines - but this is inevitable, and of course its guaranteed EU membership will make it a safer place to invest (with EU standard safeguards) and mean significant improvements to its infrastructure.

    I see great growth potential in Bulgaria regarding golf. I am buying in an area where there are 3 professional golf courses being constructed, designed by Gary Player and Ian Woosnam - so hardly amatueur developments! All the courses are by the coast which has been largely unspolit by development and on stunning cliffs. Golf will also extend the season to 8 or 9 months. In the same way Bulgaria is seen as a budget destination for a beach holiday and now skiing - it could quickly become a cheap place to play golf by the coast on stunning courses.

    I am not in it for rental anyway - more capital growth. Only time will tell.

    With Morocco there are too many uncertainties because it is not democratic with a highly dubious legal system and poor human rights. There is also a security risk there as well. Also if the King wants to make it such a huge tourist destination, there is a risk that the wholeplace could become a building site with lots and lots of development. So the same problems that now face parts of Bulgaria regarding overdevelopment, difficulties for resale and poor rental will blight Morocco as well. Also, what happens if the next King changes his mind and decides he doesnt want any further development or doesnt like foreigners in his country? Even this King can change his mind - The economist article points to an education law which was passed but never implemented.

    Anyway, just my thoughts....good luck!

  17. Hi Dogbox

    Suggest you read the latest Economist this week which has a very informative article on Morocco:


    Sounds far too risky a place to me - too much depends on the attitude of an absolute monarch in a country with extreme poverty.

    I think Bulgaria (where I have bought some holiday property) is a better and safer bet than Morocco (also a lot cheaper! - I bought for £60k a 2 bed apartment on a beach between 2 golf courses). I also think Germany is the place to go for pure investment which is what you have already done.

  18. I just got back from Berlin Trip. It has been a strange experience. All buyers are international buyers and all sellers are forced by the bank (negative equity) to sell after many years of lower prices. Unemployment is extreemly high and especially in the east some local councils are offering 2 bedroom flats for rent at only 100 euro a month. This will keep rents in control.

    However there property out there that can yield 8-9% in reasonable areas. As long as you can get cheap mortgages it makes sence as a long term investment. If rent grows 2% per year and house prices 2% per year just inline with inflation you are doing very well.

    The German population as a whole is shrinking I do not thim this will effect Berlin very much.

    I made 2 offers on 2 appartment blocks (Kreuzberg (near Bergman Strasse) & Neukoln).

    Hi soldintime

    Glad you had a good trip. Have they accepted your offers?

    May I ask which bank you have managed to get a mortgage through, and how easy was the process?

    Many thanks

  19. I used cash - 92000 euros plus 10% costs. There was a plot I pulled out of under 60000 euros. The price I paid is a little under the norm for a plot capable of having a small block of appartments built upon it. No rent so no yield but I am of the opinion my capital growth will far outstrip any loss of rent (had I bought an appartment instead).

    If you want to raise finance I think Tallin in Estonia is your best bet. They are aiming to become the high - tech heart of Europe andd there is every reason to beleive this will happen (think silicon valley prices in 10 years).

    Hi Dogbox

    Thanks for that.

    I feel a bit p*ssed off with myself. I went blindly into making 3 off apartment purchases in Bulgaria a year ago thinking that would make me easy money, but as these are now nearing completion, I am sceptical of making any money on them or even getting my money back!

    I want to keep one of the apartments in Bulgaria though, as it will make an excellent holiday home. I just need to try and find a way of selling at least one of the others to allow me to free up some of my cash to allow me to buy in Germany. I don't know how easy this is going to be though!

    I dont want to make any more mistakes if I invest in Germany. I am still not totally convinced that Berlin is the place to invest. Depopulation is a key problem, and large amount of people are moving southwards, so I am thinking this may be where to invest. But here property prices are significantly higher.

    When they say Germany's property prices have been static for many years, is this is case for the whole of the country? Or is it just the net result of property prices falling dramatically in the East, but rising in the south?

    Where you would invest in Germany other than Berlin?

  20. Hi Dogbox

    I think I read on another thread that you bought some land in Berlin.

    Did you get financing for this? If so, how did you manage it if you dont mind me asking? (as far as I can see its nigh impossible to get finance).

    And if you wanted to buy a decent plot of land in a reasonable spot, what would you say is the minimum you should expect to pay?

    Thanks for any advice and help you can give.

  21. Hi Maynard

    Maybe I can give you a more informed opinion as I have bought a couple of apartments on the Black Sea coast in Bulgaria.

    In a nutshell:

    Plus points of BG: Its still pretty cheap, budget airlines are sure to start flying there soon, EU membership which will guarantee significant improvements to the infrastructure, coastline is beautiful, countryside largely untouched, golf courses are being constructed, very cheap to eat out.

    Negative points: It is very poor, summer season is shorter than somewhere like Turkey or Spain (gets very cold in Winter!), has a declining population (this is more a problem in the rural areas), there are off plan apartments going up everywhere especially on the coast with very little control (although the govt is supposedly introducing legislation to combat this)......

    Sunny Beach is the main resort on the coast to the south. I have driven through it. Basically its like Benidorm if you like that sort of thing. A lot of Brits are buying just north of here in Sveti Vlas - supposed to be a bit more upmarket - but loads of building work going on here.

    I actually bought more up north near Varna. There you get the resorts of Golden Sands and Albena. But I decided to buy near a town called Balchik where nearby they are building 3 golf courses. Bought 2, 2 bed apartments right on the beach in a nice secluded part of the coast. Out there again next month to furnish them.

    Basically if its a cheap holiday home you want then Bulgaria is a fairly safe choice. Just dont rely on rental income, and buy first line to the beach if you can or something with a sea view (got to think of what will resell it!).

    Dont listen to others on here as I bet most of them havent taken a risk or two. Better to do something than nothing.

  22. I was interested in buying in Goa, but as I am a non resident of India, and not of Indian origin I was informed that I cannot legally buy somewhere in India. So how have you guys managed it?

    I was also told that you cannot take profits from property out of the country.

    So all sounds very risky to me.

  23. There was recently a top 25 for European countries with best investment potential. This was on C4 and in a magazine. Although I love the idea of Bulgaria it is not particularly good as investment potential (number 24 on the list). Top of the list was Roumania then Poland then Portugal.


    I would not pay too much attention to the top 25 Place in the Sun assessment which put Bulgaria at 24.

    This is because their calculation is based partly upon what the average price of property in Bulgaria is now which they state is 69k euros, whereas Romania is 25k euros. Also the reason that Portugal is number 3 on their list is because they put the average price of property in Portugal at 74k euros.

    Therefore they are saying that property in Bulgaria is currently almost as expensive as Portugal and nearly 3 times that of Romania which is just rubbish! Prices in Bulgaria are very comparable (if not cheaper than Romania).

    It is a poorly put together survey. There are plenty of other surveys which have a much more favourable assessment of the investment potential of Bulgaria. Eg this was from yesterday:


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