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Northern Boy

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About Northern Boy

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  1. I like in Ingleby Barwick in Stockton-on-Tees. Persimmon own the vast majority of the remaining land in the area and sell it to the likes of Bryant, Barret and Miller (at a premium I imagine!). Hence, their prices are lower than the other builders, although they are also poorer built, I'm renting one at the mo! Anyway, they had to start advertising apartments and houses on Rightmove last year because they obviously haven't been shifting as quickly as they'd like. They're now reducing prices lower than they were 18 months ago, when I viewed the show homes and got sales information. I've now spotted this. http://www.rightmove.co.uk/viewdetails-190...4&tr_t=rent They're trying to rent the larger and more expensive houses that they can't shift! Has anyone else sen this before?? I've been tracking the asking prices of three bed detached properties for the last year and they've dropped by 3%, I think its just the start. A lot of friends and family are buying and saying I'm mad to throwing rent away! But the way I see it (in simple terms) is that I'm paying £550 rent on a £150k property, which a 25 year capital repayment would cost me £1100 per month. So I save the £550 towards a larger deposit while the rent is equivalent to the mortgage interest. Providing my rent stays the same and prices stagnate or continue to fall then I can't loose out!?? I wait for 20% drop in prices and buy with a large deposit or if prices start to rise I possibly reconsider. Northern Boy
  2. bump I posted this yesterday lunchtime to try and get some good comments, but for some reason it didn't get posted, any further comments would be appreciated before I start searching the internet for information.
  3. I have a family member that has been ill over previous years and as such has “lived life to the full” and got into considerable debt (approx. £45k). He is now in a position whereas he is unable to meet all the payments and as such entered into a Debt Management Plan via the Consumer Credit Council. The advise that was given upon entering this plan was that all the companies would be contacted and they would be made aware of the percentage of the payment that would go to them and a request to stop all fee’s and interest. Unfortunately, on checking the monthly statement it appears that this is not the case and one of the debts has risen from £21k to £25k in only a few months. I am yet to question this on his behalf, although this example seems extreme all the other debts also seem to be increasing rather than decreasing, which implies that fee’s and interest has not been stopped. Just a point to note, it took me weeks (honestly) to get through to ask questions regarding this (to the CCC). Apparently, they are inundated with requests for advice and plans at the moment and the fallout of the last ten years of spending is hitting home hard. My concern is that in the event of death (God forbid) then any outstanding debts would still come from his estate (both secured and unsecured). In the current circumstances I can just see his estate and inheritance for grandchildren reducing due to the large fee’s and interest payments the lenders are applying while on this plan. My solution is as follows, and this is the main reason for the topic, any advise/ guidance would be much appreciated. I currently rent a three bed semi for £550 per months, which is valued at £150k. I truly believe that the housing market is overpriced and I won’t buy until prices fall by 20%. I am considering taking out a mortgage for £45k and buying the property from my relative. He will then repay all of his debts with the £45k, I would then rent the property back at a rent which will cover the mortgage. In the event of his death then I would sell the property and any equity would be split between the grandchildren. The house is worth approx. £90k at present, but needs a little work, so approx. £40k between the grandchildren. My belief is that this could also work to my advantage, I currently have no deposit as I am concentrating on repaying debts. As such, once I believe the market is right and I buy, I would have £45 equity and as such the bank would see me as a secure customer and offer me a better rate. If, for instance, the prices fall by 20% then the house would be worth £72k, still leaving equity of £27k. I assume with £27k equity I could then purchase the house I want (currently £185k - £148k after crash) with almost a 20% deposit. Is my thinking correct? Or would I have to leave so much equity in the first property and have a larger minimum deposit in the second property as it would be classed as a BTL? How would Capital Gains Tax affect me? What would I be liable to pay? I assume the council tax would be covered by the tenant, and if they currently don’t pay council tax then I wouldn’t have too. In advance, I much appreciate your advice. I would really like to help this relative, but at the same time don’t want to hinder my entering the market when the time is right. Northern Boy
  4. I find it unbelieveable that the banks play down the fact that a few interest rises can lead to you house being repod. All they want is a sale and they don't give a damn what interest rates do! I was a little suprised the other day when I was looking at a new build, the sales womnn told me not to overstretch myself and make sure I have plenty of money to "play around with". What makes me laugh is the same woman had previously told me (a few months before) to stretch myself to get the best I can???!!!
  5. I was just checking on the HSBC website what they would loan me for a mortgage and the monthly repayments. Then a pop up window appeared asking if I would like to chat, this has happened a few times and this time I thought I would try and play with their minds!! See below, I hadn't planned this so the questions are not properly thought out. I was trying to play it simple. Please wait for a Mortgage Representative to respond. You are now chatting with Sylvie, an HSBC Mortgage Expert within Direct Financial Services. Please be aware that we will not require your account details as part of this web chat service. Sylvie: Hello your through to Sylvie, how may I help you today? You: I am renting at present and looking to buy? If interest rates rise will my mortgage go up? Sylvie: That would depend, if you take a fixed rate then your payments would stay the same until the end of your fixed term, if you take a variable rate then yes your monthly repayments will go up or down accordingly does this explain? You: Yes, how likely is it that rates will rise? Who decides this? What is the maxiumum that they can go? Sylvie: I'm afraid we have no idea what will happen to the rates it is the bank of England that decide what the rates will do You: What length of fixed rate do you offer/ would recommend? Sylvie: 2,3,5 and 10 year fixed You: If I was to take out a 2 year fixed rate, what would the rate be? Sylvie: 2 year fixed rate is 5.99% with the apr at 6.0% You: Rates have rised three times I believe and may rise again. What would happen to my interest rate if the Bank of England raised rates by 1%? Sylvie: I could'nt say sorry it could be that your current rate would go up the same but I can't say. Do you have a mortgage at this time? You: I have no mortgage at this time, I am a FTB. Sylvie: When are you looking to buy? You: I am trying to work out if I could afford it and if I am better to rent. Friends and family tell me that renting is a waste and that I would be better buying. Sylvie: Would you like me to see how much we could lend you? You: Yes please, I earn £30k and my girlfrinds earns £20k. She is only on a temporary contract though! Sylvie: Ok if you forward me your name and telephone number I will call you straight away You: Is it possible to do it on-line as I am at work. The property I am looking at is £150k can you give me a figure for monthly payments over 25 years on the 2 year fixed rate please. Sylvie: Sorry I would need to speak to you, is there a better time for you? You: Assuming if I could borrow that amount, can you not calculate the figures for me? Sylvie: No, all of our quotes are personal quotes so I would need your details first sorry You: Ok, I will try and do it online. You: I have another question? Sylvie: Yes I was just going to suggest you try the HSBC web site you can get all the information on there and if you want to you can call on 0800 494 999 we are open every day from 8am to 9pm You: If for instance, my payments were £900 per month and rates doubled could my new payments rise to £1350 at the end of my fixed rate? If so, is there any kind of protection/ insurance I can take out in this event. You: I believe this may happen if inflation continues to rise. Sylvie: Going back to your girlfreind, we would only take contract into consideration if she had been with the company for two years and the contract had been renewed at least once and that is likely to be renewed again... Sylvie: No, all of our quotes are personal quotes so I would need your details first sorry You: Ok, I will try and do it online. You: I have another question? Sylvie: Yes I was just going to suggest you try the HSBC web site you can get all the information on there and if you want to you can call on 0800 494 999 we are open every day from 8am to 9pm You: If for instance, my payments were £900 per month and rates doubled could my new payments rise to £1350 at the end of my fixed rate? If so, is there any kind of protection/ insurance I can take out in this event. You: I believe this may happen if inflation continues to rise. Sylvie: Going back to your girlfreind, we would only take contract into consideration if she had been with the company for two years and the contract had been renewed at least once and that is likely to be renewed again... Sylvie: Yes of course you payments could go up this high but if you fixed then you could fix for 10 years and then you would'nt have to worry about it for a while You: What would happen if I couldn't meet the new payments? Would my house be repossesed? Sylvie: Yes possibly You: Do you offer insurance against this? Sylvie: No, however if you did go for our 10year fixed rate then you would have security for this length of time and who know's by then the rates might have started to come down You: Can HSBC advise on whether I am better to wait and rent while saving a larger deposit? I am a HSBC customer. Would it be better to buy now before prices rise further? Sylvie: I can advise you however if you would like me to arrange an appointment with your local HSBC bank I'd be happy to do so, would this help you? You: I will call into my branch when I am next in town. Thanks for the help. Sylvie: Your welcome I wish you look with your house buying, bye for now, take casre UNBELIEVEABLE
  6. There is almost so much focus on the South! Look at the North up 75%. There is no shortage of property where I am, they just keep building. At present we could afford a 2 bed semi for £125k. Looking at the last crash from Q3 89 to Q1 93 (Approx. 3.5 years) prices dropped by an average of 20%. 15% on the older properties. I'm waiting for this, that means my £125k at present will get me £147k at todays rates - thats a 3 bed detached. (at 15%) I'm sitting it out, I'm sure I can wait three and a half years. Would like it to happen sooner like, I'm a bit of a DIY fan. Northern Boy
  7. In reply - Overdraft would have been paid off (its no loger interest free) but had to loan my girlfriend some money - My student loan is getting repaid (I'm now on £30k - a lot for my age I know!) - Credit cards are all life of balance - 3.9 and 5.9% - Otherwise I would have added extra to my loan to repay - Car loan was from HSBC at 7.9% - car was a bargain too - Skoda diesel 60k for £5k I only overspent when living in the South, with increased rents etc. This is no more.. Everything else i.e. repayments/ credit check should be fine. HOWEVER, with paying all this debt so fast I'm not saving for a deposit, so if the banks do remove the 100% grad mortgage I will be stuck. Hence, the question of adding extra to the loan to tuck away for a deposit while the banks will loan/ rates are low. I could also reduce my debt reayments and save some for a deposit i.e. 50/50. I think what you are trying to say is, if they do withdraw 100% and I have no deposit - then I will always be able to take out a loan then? Possibly at a higher rate!
  8. Why does it take so long for topics to be posted?
  9. Hi all, Been a while since I posted, but been keeping an eye on the main news and a couple of the topics. Just to keep people informed, my area (Stocton-on-Tees - West of Middlesbrough) is seeing no increase in prices! There is atleast 60 homes within 3 miles of where I rent for under £170k! 1 bed flat - £95k, 2 bed flat - £120k, 3 bed sem - £140k, 3 bed detached - £160k. May seem cheap, but expensive for the area considering low average wages, houses doubled in last 5 years (as with most places!). Anyway, to get to the point, I am currently repaying grad overdraft, loan and credit cards. You may ask why so much debt from uni? Well, mainly buying a car (needed something reliable with me travelling to and from London weekly in my first job) plus I went travelling for a couple of months after uni and I overspent every month that I worked in the South! As well as repaying debts (at a fast rate), I am also paying into a final salary pension and have joined a share save scheme. Seems like a good deal considering (assuming I keep the shares for 5 years) I get a reduction of 31.4% as they are purchased prior to tax and NI, plus the company buy me a fourth for every three that I buy. So, the £1k I invested will be worth £2k in 5 years providing no increase in share prices, assuming it follows previous trends then this could be £5/6k!!! Anyway, I'll get there eventually - being a graduate I can get 100% mortgage. However, I assume if you put down 5% you will get a better rate and save in the long run. So, would I be better off taking out a fixed rate loan now (for a deposit) and sticking it in a savings account? I know I will loose some money, however, I am worried that if banks tighten their lending criteria then I won't get a loan! Plus if they stop 100% for graduates and I have no deposit I could end up stuck renting when property prices have dropped to a point at which I believe they are "normal". Any comments?! Northern Boy
  10. CAN ANYONE ACTUALLY FAULT MY FIGURES - Or is it true, it all "depends"? Houses stagnate and yes you are better to wait, rent and save a larger deposit?????????????????????????????????????
  11. Where do you get the increase in detached houses from, if your referring to new builds then fair enough but http://www.home.co.uk/guides/house_prices_...&lastyear=1 clearly shows a 11% drop in value over the last year!!!! Semi's have gone +14%, but terraced have gone -25%. On average up 2%!! Just take a look at rightmove, large detached houses in the area between £150k and £250k are struggling to sell!! In the last few weeks there has been £5k dropped of a number of the properties at the bottom end of the market. Me thinks the BTL are trying to get out, rental properties are just not shifting... I very much doubt that estate agents are getting the £290 to £320k for these houses. The new three storey 4 bed semi's are only £210k and the floor space of these is unreal!! Your road must be popular for rental but properties are still around from when I looked 6 months ago and my neighbour has theirs up for rent as they are moving and they've not had a single viewing!! A number of properties are still to rent for £425!! Wages - So you both earn £36k, do you expect your other half to continue to work when you have kids?? I wouldn't, in my opinion this is one reason kids are going off the rails as parents simply don't realise the effort required raising children!! How do you think the cars are paid for?? Debt MEW?? I can picture your situation, you have bought within the last 2 years hoping for large capital gains. Rates are increasing, prices are dropping, the properties are not shifting and as a result you are wondering whether you made the right move?????? However, you feel better to try and persuade others to buy rather than face up to the fact that negative equity is just around the corner!! If your not worried then why be on here in the first place!! At the end of the day, prices for 3 bed semi's have only dropped since I started renting 6 months ago!! So its certainly better to rent and save rather than buy. I may by if prices start to rice, but in reality I cannot see this happening. You refer to good paid jobs, yes, there is a couple of large well paying companies but nowhere near enough to sustain this market. PLUS.. corus looks likely to shut in the next couple of years (3000 employees) and the local council announce min. 100 job losses and factory in hartlepool shutting .... job losses galore in the area...
  12. Not sure where your looking at, but 76k won't get you a nice place, an ex-council in an OK!!! place maybee. More like a £100k to be honest. As for £47k, the only ex-council you will get for that is in the worst of areas, a street full of smack heads if thats what you fancy!! My landlord bought the property 4/5 months before I moved in, I was the first tenant, £6000 down the drain!!! Plus in that time, getting on for a year now the prices are still static.... and are starting to fall. You refer to terraced houses doubling on the last two years, that's the amature BTL getting on baord before its too late... The streets are now lined with for sale or to let, either way they are going to loose out. As for the rest of the properties, detached and flats etc. have all dropped. Detached have dropped 10% in the last year. I really think your arguement is flawed!! Unless you live in the area and can see what is happening... Believe me as soon as "crash" appears in a paper, they'll all be breaking the EA's doors down to get rid of them quick...
  13. There's a new road over the tees from Stockton, so takes me 5 mins to get to A66. They're still building, think they're getting to the point of having no more land now. So they've started on the opposite side of the river near all the car garages, which is a little bit stupid, bit like living in the middle of an industrial estate.
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