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Muswell Hillbilly

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Everything posted by Muswell Hillbilly

  1. Seen the floor plan? You go straight in to the living room, and the kitchen is basically just the end of the corridor? That’s the kind of shitty conversion you see in London. Give me a purpose-built, well laid-out tenement flat any day!
  2. God, Quartermile makes me angry. They knocked down half of the elegant old Royal Infirmary, moved the hospital out to the edge of town, and the remaining blocks of the Infirmary have been hollowed out inside, all twigs-in-a-vase style, and now find themselves sandwiched between those hideous new tower blocks. And £395,000 for 97 square metres? That’s obscene, too! I wonder how long it will be before the weird different-shades-of-grey tiles start falling off the sides of the tower blocks. Incidentally, Simpson Loan isn’t even a public street. Go there in the evening with a camera, and a private security guard will come out and tell you not to take photos. It’s private land masquerading as a public street, so it’s outwith the remit of the council and the police, and if you don’t like how it’s run, you can’t vote anyone out of office.
  3. Well, the current owners (who bought it new) paid £125,995 for it two years ago, and it’s their birthright to make a profit, don’tcha know!
  4. I’d love to see the sales volumes. They must be incredibly low. For example, the number of two-bedroom flats in Marchmont/Bruntsfield which changed hands in December is probably in single digits. There was very, very little on the market throughout the autumn, and even less is actually selling. So I would suggest that the average prices are very heavily subject to noise.
  5. Yes, you’re missing something on this occasion: click on Particulars, and you’ll see that ‘22 Glen Street offers an excellent opportunity to purchase a self contained block of 4 properties’.
  6. Yes, of course it totally depends on how many people are interested. In theory it’s a buyer’s market, but the shortage of supply at the moment is keeping prices inflated. I was affected by the 250K stamp duty threshold, as any half-decent flat round Bruntsfield and Marchmont currently sells quickly the moment the price is dropped to 250K fixed price, as at that point multiple buyers are interested. This threshold is maintaining prices at 250K, and not letting them fall further. Some flats are even selling for above this threshold – I was surprised to see that one on Spottiswoode Road recently went for the full asking price of 270K – although in general they just languish on the market until the price is dropped to 250K. If you’re looking to buy in an area where there are more homes for sale, and you are not affected by any artificial price thresholds, then factors like being a cash buyer with no chain may well work in your favour.
  7. Another fly in the ointment for this cunning plan is that offers ‘subject to survey’ are regarded as less attractive to sellers than unconditional offers. If a buyer who accepts the Home Report survey is able to make an unconditional offer, then your offer which is subject to your own survey may be overlooked. When I bought my Edinburgh flat recently, I had no option but to submit an offer ‘subject to survey’, because the seller had got his Home Report done on the cheap without a mortgage valuation survey. The selling agent was less than delighted about this condition being attached, but any potential buyer with a mortgage would have needed it. If offering on a property which has a full Home Report complete with valuation, though, then there would be no need to attach a condition to the offer, and if there were any competition for the property, an offer with a condition attached might be rejected.
  8. Oops, yes – our seller had opted for the cheapest, knock-down, budget kind of home report, which didn’t even include a mortgage valuation, so we had to pay an additional £306 for a basic mortgage valuation survey.
  9. If you want a general indication of the costs involved in buying a home in Edinburgh right now, the conveyancing fees are a little shy of £1000 including VAT. On top of that you have Registers of Scotland registration fees, as shown here, and then of course there is the stamp duty. All of these charges are bundled together in the solicitor’s fees, which have to be paid in order for the keys to be released. On my recent purchase of £250,000, I paid the solicitor £3,988 in all – £2,500 stamp duty, £540 registration fees, and £790 + £158 VAT conveyancing fees. I got estimates from three or four solicitors, and they were all very similar.
  10. You can see whether there is a registered landlord for a property on the Scottish Landlord Registration site. As for finding out whether any of those properties is an HMO (house in multiple occupation), I would guess that you would have to contact the city council and ask.
  11. As I have just bought in Edinburgh – a classic two-bedroom tenement flat of a little over 100 m² in a very nice road for £250K – I think sod’s law dictates that prices will now plummet! At the moment, I believe that prices in the ‘mid market’ are being sustained by the total absence of forced sales. It seems to me that, in Edinburgh, people only put their homes (or their BTLs) up for sale if they have to, or if they perceive that prices are increasing. Otherwise, they just stay put, or become accidental landlords, or (if they are already landlords) wait a little longer. At the end of 2009, in my search area (Marchmont, Bruntsfield, Morningside and around), several properties had sold, and others got withdrawn from the market, with the result that there was virtually nothing left for sale. Consequently prices rose again. The same thing is happening at the end of 2011. In particular, the 3% stamp duty threshold of £250,000 is proving extremely sticky. Flats which are priced a little above this, e.g. offers around £270,000, continue to sit on the market. However, the moment a decent flat goes to fixed price £250,000, it sells immediately. Mrs Hillbilly and I witnessed this happen with one, before we got ourselves together and were sufficiently organised to pounce when another (better) one went to £250K fixed price. How this affects the prices of larger properties above this level, I cannot say, but I have also been observing the few three-bedroom flats (mostly around 120–130 m²) in my local area, and they have been selling for surprisingly high prices, and in my opinion there is no prospect of them falling below the 250K threshold in the foreseeable future. (I have seen about two such flats, in need of work, sell for 240–250K, but they were on main roads like Strathearn Road.) A lovely large three-bedder on Lauderdale Street, despite being in need of complete redecoration and a new kitchen, sold very quickly for £325K. Going back to the two-bedroom flats with which I am more familiar, despite them being stuck around £250K, taking into account inflation I believe we are roughly back at 2003 prices. According to one inflation calculator, £193K in December 2003 is equivalent to £250K now. For me personally, taking into account my salary increases over the same period, including the two years when my pay was frozen, £250K today is equivalent to £199K in 2003. On the particular road where I have bought, similar properties in the middle of 2003 sold for 215–218K, so that’s a real-terms fall of 8% since then. (At the height of the bubble, in 2008, one sold for over 360K!) For me, this is not a bad fall, and considering I STR’d in summer 2006 and have been renting for far longer than I ever expected, I think that for me personally it’s not a bad time to buy again. Furthermore, I fear that the Bank of England will turn on the printing presses in earnest, so I would not be at all surprised if the further falls from now are entirely real rather than nominal. In other words, I wouldn’t be surprised if my flat were still worth £250K in five years’ time, but £250K will be a significantly smaller sum of money in real terms. (I also imagine that wage inflation will have to catch up to some extent with price inflation at some point.) This was a big reason for my buying now, as the large deposit that I had in various bank and building society accounts was being eroded by inflation, and I didn’t feel too secure having £190,000 in banks anyway, even with the £85K ‘guarantee’. I felt squeezed by three things: QE and inflation, rising rents (ours had just gone up for the first time in four years), and the lack of property for sale and the lack of forced sales keeping prices high in my area. Thanks to my large STR fund, I have been able to take out a mortgage for just 28% loan-to-value, paying it back over less than ten years, fixed for the first three at 2.99%. Therefore the monthly payments will be less than my rent, but we’ll be paying off chunks of capital from the very beginning. So much time has elapsed since many of us got addicted to HPC that prices which seemed outlandishly high around 2006 are now merely stupidly high. Remember that inflation, even in wages to some extent, has made £250K today worth no more than around £200K in 2003/04 – and the ridiculous bubble prices like £330K for a 90 m² flat in 2007/08 have long since passed. If you look back at sold prices from 2002–2004, you may well find that, adjusted for inflation, they are about the same as today’s sale prices. For people who are not old enough and lucky enough to have bought in the 1990s and sold to rent, or for those who were brave enough to have bought precious metals, the situation may be very different and it may well be worth sitting tight and watching the market for longer before buying. As for me, I have not now become a bull, and neither do I have a vested interest in prices rising. Rather, for the sake of society overall, as I would like ordinary people doing ordinary jobs to be able to buy ordinary homes, I would argue that I have a vested interest in prices falling further. But for Mrs Hillbilly and me, now seems like a reasonable time to blow our STR fund and buy a place of our own. By the way, home report valuations are ********, but sellers do seem to set store by them. In the current market, though, if somebody actually wants to sell, they’ll ignore an HR valuation of £270K and go for £250K fixed price instead.
  12. Thanks for the ‘heads up’, Geneer. I think the sales volumes must be so incredibly low that it is difficult to extract any statistical sense from the regional breakdown. Most notably, the average price of two-bedroom flats in Marchmont/Bruntsfield is down 11% on the year, at £233K, while the price in Stockbridge/Comely Bank is up 6%, at £231K! In the same period a year ago, Marchmont/Bruntsfield was 20% more expensive than Stockbridge/Comely Bank, whereas now it is only 1% more expensive! I doubt whether the neighbourhood of EH9/10 has gone so far downhill while that of EH3/4 has become so much more desirable. Rather, the handful of properties which have shifted in the former have maybe been slightly smaller and more on the main roads, whereas the tiny number which shifted in the latter were perhaps larger and in better condition. It’s good to see the ESPC highlighting the fact that the Gorgie/Easter Road one-bedders are back to 2004 prices in nominal terms. I’m guessing that in real terms, even calculating inflation by average wage increases rather than CPI/RPI, that must take their prices back to the early 2000s. That, surely, constitutes a crash.
  13. Because the British regard the ‘bedroom’ as the basic unit of measurement, we allow ourselves to be ripped off. Builders of new homes feed off this, and like to cram in as many ‘bedrooms’ as possible – ‘wow, it’s got five bedrooms, it must be worth a fortune’ – even if most of the rooms are little more than glorified cupboards. I believe most of the rest of the world use the square metre instead (or the square foot in the USA), which makes it much easier to compare sizes and more difficult to conceal small ones.
  14. Shandon seems like a reasonable area to me. It has the same lovely tenement flats as Bruntsfield or Morningside, is green (Harrison Park and the Canal) and quiet, is close to the excellent 44 bus route, yet is a fair whack cheaper than Bruntsfield or Morningside. Of course it doesn’t have much in the way of facilities – no trendy cafés or anything – which may explain the difference in price. The whole Juniper Green/Currie/Balerno axis seems a long way out of the centre, but does have an excellent bus service. Balerno is just an overpriced 1970s housing estate; Currie has a nice old bit and a rather grey (and fairly cheap) more modern bit; while Juniper Green just looks rather lovely and very expensive.
  15. Presumably you have a solicitor instructed already. He/she should be able to advise you whether a rejected offer is still ‘on the table’. I shall now come out and say that I am also buying at the moment. My situation may be different from Lulu’s, because I’m an STR, being lucky enough to have bought my first home in 1998 and sold it in 2006 (in London). I was going to post my reasons for buying at a slightly later date, so watch this space! I’m not turning bull, though – just feeling squeezed by inflation eroding savings, rent increasing, and the lack of new supply in Edinburgh this autumn maintaining higher prices, as happened in autumn 2009 too. I would say to Lulu, don’t get carried away in any silly bidding wars, though. Stick to your guns, offer what you feel the property is worth (and what the survey/home report says it is worth), and if somebody else gets it, then I’m sure sooner or later something better will come up – though I imagine it won’t be until the spring now. Good luck!
  16. Eyes passim ad nauseam, as they say. In other words, this has been covered in Private Eye for several months already. It’s only now that the more mainstream media have started to take notice, probably because of the recent appearance of HM Revenue & Customs boss Dave Hartnett in front of the public accounts committee. If you really want to know what’s going on in the UK, you do have to read Private Eye, though, including all the serious, unfunny bits at the front and back.
  17. Please, Mister, help! Someone’s cut a chunk out of my bedroom and put a kitchenette in it! £3,680 per square metre … it’s right at the bottom of the New Town, on the way to Stockbridge. I don’t know the area well enough to know whether that is a reasonable price, but what a horrible conversion they’ve made.
  18. Ah, but the Sunday Times is, as Private Eye often used to call it, ‘Britain’s largest tabloid’! It still has a circulation of nearly a million (ABC figures, far more than any other ‘broadsheet’ Sunday paper.
  19. Produce from local markets is still cheap, but anything bought in supermarkets, or any international brands of consumer goods, cost the same as in the UK. In fact things tend to be even more expensive than in the UK, as Polish VAT is higher and has fewer exeptions. Furthermore, at least in rural areas, there is very little competition, so supermarkets do not have any of the BOGOFs or other offers that we get in the UK. On local wages or pensions, the UK-style prices in the shops are very high. Also there is a vast difference between ‘Poland A’ (Warsaw, and to some extent the other big cities) and ‘Poland B’ (the rural and post-industrial backwaters), at least in terms of earnings. It’s kind of like the difference between London and the rest of the UK, but much more so. Admittedly I don’t live there, but Mrs Hillbilly goes once or twice a year to visit her family who, unfortunately, all live in Poland B.
  20. I wonder if this phenomenon is known at all in the outside world, outside of the rarefied circles of HPC. I don’t know much about financial law and regulation, but it does look decidedly dodgy, even if it is legal. Even if the mainstream media wouldn’t be interested, it may well be worth drawing it to the attention of the ‘In the City’ column of Private Eye. If somebody who knows more about these matters than I do could write a succint summary, it could be sent to Private Eye via their web site.
  21. Students in flats which have not been mutilated usually get much larger rooms, though, especially the one who gets the living room with the bay window. I wonder whether the numbers add up nowadays, either for this mutilated flat or for an unaltered one. How much are the cheapest BTL mortgages now, and what kinds of deposits do landlords tend to put down? Let’s say you can get a two-bedroom tenement flat for 250K (which is the average rate for Marchmont/Bruntsfield according to the ESPC). Put down 25% deposit, borrow £187,500 over 25 years at 5%. Repayments would be around £1,095 per month (capital and interest), so the rent from three students would in fact just about cover it, ignoring agents’ fees (which can be substantial), repairs, voids and tax (20% or 40%, depending on income). I suppose the additional rent from the Festival month would bump up the income a fair bit. So the sums are marginal, at best, for a three-person HMO in a two-bedroom flat. I can see why letting a property as a student HMO is so attractive, though. The going rate for rent of a regular flat without an HMO licence is only £800 per month, and non-student tenants would most likely be there all year, so it wouldn’t be possible to get Festival tenants in during August. As for the monster at 1 Warrender Park Crescent, if you could get a group of seven to rent it at £350 pcm each, the total rental income would be £2,450 pcm. Again, assuming a 75% BTL mortgage at 5%, based on the asking price of £435,000, the monthly repayments would be around £1,905, so in this case the rental income (again ignoring fees, repairs, voids and tax) more than covers the mortgage. I would imagine that the risks inherent in letting out a flat as a seven-person HMO would be greater, though. Besides, who has £108,750 sitting around as a deposit for buying a stduent flat? In 2007, perhaps (except that then they would have done it on a 100% interest-only mortgage), but it looks a lot less likely now.
  22. Er, I meant that I expect most of the falls in the current crash from here on to be nominal rather than real. So I wouldn’t be at all surprised if if the average house price remains around £160,000 while gradually £160,000 becomes worth less and less due to general inflation. Also, although I have no idea whether this is a possibility, I wonder whether some time later wage inflation will begin to catch up, so a £100,000 mortgage, say, will eventually seem smaller and smaller. I’m eager for more ‘keep the faith’ arguments myself! We have not yet bought anywhere, but are seriously looking to do so during the coming weeks/months. And if, by being one of the last cash-rich buyers to be suckered in, we help to bring about a proper crash later on, then good! I don’t mind losing a chunk of my unearned income, obtained as a result of ludicrous HPI between 1998 and 2006, if the economy ends up regaining some semblance of normality, and regular people doing regular jobs can afford to buy regular homes again.
  23. Yes, very true, and up until now I have agreed that an STR fund only needs to be compared with the price of houses, not with the price of bread or whatever is currently being inflated. However, the last time the government printed a load of money, house prices went up again, along with commodities, shares and pretty much everything. When QE2 takes place, I fear the same will happen. Also I can’t help but feel that real house prices should have fallen more, and only haven’t done so because of the value of money being inflated away. I now expect that most of the falls in this current crash will be nominal rather than actual, as the government seems to want to inflate away debt. The main flaw in my reasoning is the lack of wage inflation: even if house prices fall in nominal terms, they don’t become any more affordable if wages are not rising. In fact, as somebody else said on this thread, they become less affordable, as people have less money left over to spend on housing. Is it possible that there will be wage inflation later, after a few years of price inflation? What do the economics experts on here think? Also, I wonder what proportion of the general population has actually Sold To Rent over the last few years. I would imagine it is very, very small. Most people ‘on the ladder’ would not dream of coming off it; it was only reading this forum back in 2004–06 that gave me the confidence to STR myself. If those of us lucky enough to have STR funds are now throwing in the towel and buying, then so be it – that’s our lookout – but I think the overall effect on HPI will be negligible.
  24. I feel I should add my 2 p’s worth here. In fact I was thinking of posting on the Str's - Anyone Getting Worried? thread. We (Mrs Hillbilly and I) STR’d in London in summer 2006 and moved to Edinburgh a year later. We’ve now been renting a very nice flat in Edinburgh for four years, and have just had notification that our rent is to go up, for the first time, from £725 to £780. Meanwhile, prices of similar flats to the one we’re renting have fallen from a bubbletastic 310–350K down to around 250K – a fall of around 25% or even more in some cases. We have a load of money slooshing around in various building society accounts, because the flat we sold in London in 2006, I had been lucky enough to buy in 1998. I now worry that QE2 is imminent, inflating away our savings still further. Also the property market in Edinburgh is very localised and very cyclical. In late 2009 the supply of properties on the market fell to almost zero, and prices went up again. During the first half of 2011 the supply increased to record levels, prices went down, and now in the autumn virtually nothing is coming to the market. I worry that supply will dwindle again, prices will go up, and another two-year mini-cycle will begin. Meanwhile there are some extremely cheap mortgage deals out there. I worked out that a ten-year mortgage for the relatively small LTV that we would need (26% or so) would cost less each month than we are paying in rent. Therefore, rather than hold out further, we have decided to take the plunge and buy a flat like our current rented one. Originally we were hoping to get something bigger for the same money, but we’ll compromise and buy something now. Quite honestly, I would feel safer owning a property now than holding cash; also I’m very reluctant to gamble on the stock exchange or buy precious metals. I still do expect prices to fall, at least in real terms, if not nominal, but because we are in the lucky position of having a big STR fund, it doesn’t matter too much. We sold our old gaff at a paper profit of about 140K, so if we buy something now for 250K and it falls in value to 200K, it is only 50K of totally unearned income – funny money – that we would lose. Furthermore, by taking a mortgage over just nine or ten years, the amount of money paid in interest is, relatively, very low. Each month from the outset we would be paying back large chunks of capital, and we’d rather do that for our own place than for our landlord’s. And if the government tries to inflate away debt, then our mortgage would be inflated away with it, although I realise that this is all pretty meaningless in the absence of wage inflation.
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