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Icingonthecake

Flats Sell For Above Asking Price!

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The mothers partner has asked me to look for a property for him to buy ( he has no home of his own he lives in my mothers house) to create an income for him now he is unable to work. He as about 90 grand saved and has no pension and is unable to work due to an industrial injury, and so is finding it hard to get by on the paltry interest his savings produce.

Anyway, found the following two properties on righmove which would get £700-750 per month gross income (rent), so called up the agent.

http://www.rightmove.co.uk/property-for-sa..._includeSSTC=on

Was told that they are reposessions, and that in fact they had gone to 'final and best offers' this week and had provisionally sold for prices over the asking price!.

I know flats of this size in this actual development were being marketed at £155,000 towards the peak and selling there or thereabouts, so assuming an even selling price of £150,000, they have fallen somewhere close to 40%.

Of course, like Thamesmead, Erith is far from the most desirable place to live, so new build style flats dropping is hardly gonna surprise those on here, but the fact that there is even a measure of competition for these properties is perhaps a little surprise?

I Still feel that there are no firm reasons to beleive that prices have bottomed, but with a gross yield of around 10% some of these places are looking attractive to those with cash to spend. Even if rents fall 20% (as could easily occur) the returns beat savings accounts even allowing for a 5% annual price fall for some years to come.

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I Still feel that there are no firm reasons to beleive that prices have bottomed, but with a gross yield of around 10% some of these places are looking attractive to those with cash to spend. Even if rents fall 20% (as could easily occur) the returns beat savings accounts even allowing for a 5% annual price fall for some years to come.

This year's annual fall (Apr 08 - Apr 09) is around 15%.

5% annual from here seems extremely optimistic to me.

Personally I would wait and only buy when there is clear evidence that YoY falls are approcahing zero. That way he gets more house for his money, less capital risk and a higher yield.

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Anyway, found the following two properties on righmove which would get £700-750 per month gross income (rent), so called up the agent.

I doubt that.

I know the area and I would expect 550 to 600 a month for a 2 bed flat. That is generous as it's not a nice area.

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you can rent this for £695 pm, and this is a top floor flat!

http://www.rightmove.co.uk/property-to-ren...y-12214290.html?

What about parking, do you get that on the two you suggest? You do on the above rental.

Wow I was right about the rents falling 20%, just during the time of this post, this market is really screwed!.

Yep I reckon prices have further to fall, and have advised Mums partner to not panic, as the right deal will come up. I personally would'nt have paid over 90 for the flats, I feel their fair value given the location to be nearer £82-85,000, and right now it would just feel wrong to actuall pay over an advertised price!.

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