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modelreject

Domestic Capital Value House Negotiations

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A newbie to the forums so apologies if this has been asked a million times before.

I found this link (http://vlistdcv.lpsni.gov.uk/search.asp?submit=form) in another thread and have been comparing the current property value of a few houses I am interested in, to the Domestic Capital Value.

Can someone please explain what the Domestic Capital Value is and if it can be used in negotiating a price drop in a property I am interested in.

Many thanks.

C

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Subby as far as I know rateable value and Domestic capital value is the same thing.

He did make me wonder :unsure: Maybe subby was extracting the urine :D

DCV is the estimated value of all properties in Northern Ireland on 1st January 2005.

I consider it to be a very good indication of the true value of any property in Northern Ireland. However, in 2005 we were well into the housing buibble. I think house prices will fall to 2002/3 price levels. DCV-30% should be the bottom of the market. Current asking prices are irrelevant and only an indication of how big the bubble was and how silly prices became.

Edited by Belfast Boy

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He did make me wonder :unsure: Maybe subby was extracting the urine :D

DCV is the estimated value of all propereties in Northern Ireland on 1st January 2005.

I consider it to be a very good indication of the true value of any property is in Northern Ireland. However, in 2005 we were well into the housing buibble. I think house prices will fall to 2002/3 price levels. DCV-30% should be the bottom of the market. Current asking prices are irrelevant and only an indication of how big the bubble was and how silly prices became.

Ever moving target. keep adjusting and you will always be right. - only pulling your leg.

The DCV were set by those experts in the market called EA. Are they high or low - no idea. Because they were in hindsight, to speak most people were pleased because by the time they cane out the perceived value had risen beyond what was quoted. If I was an EA I would be pleased at how everyone respected their opinion. whilst we all know it was finger in the wind.

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Hello and welcome. Many of us, like myself, view this DCV as a level which is roughly 2005 prices. However at the time of the district valuation there were many people who felt that the DCV was too high. Therefore it depends on your point of view whether you think this is a fair price for a house. In 2007 many of the houses were twice and three times the DCV and indeed many still are in that delusional state.

If you mention DCV to an estate agent they immediately come back with "ah but that's not market value" They fail to realise that market value is what someone will pay for a pile of bricks not what the vendor or the EA thinks its worth.

I have no faith in the DCV at all.

It's a computer valuation based on square footage, and local amenities.

I was on site when one of their valuers called to value a house we had just finished. The "valuer" though I was the owner and asked, "what did I want the valuation to be, your rates are based on it you know". She took an external measurement and went on her way. She never even looked at the massive garage with games room and office above.

Handy job if you can get it.

Computer Assisted Mass Appraisal (CAMA )- Questions and Answers

How were capital values assessed?

Assessed Capital Values are based on property market sales. Between 2002 and 2005 we inspected domestic properties that sold on the open market. Statistical analysis of the sales information determined which property characteristics are important and how important they are in explaining sale price. In this analysis sale prices were time adjusted to reflect what price properties would have sold for on 1 January 2005, the valuation date as set in legislation.

What is CAMA?

Computer assisted mass appraisal (CAMA) is the world recognized standard approach to mass valuation exercises, and is used to produce first pass estimates of capital value for property taxation purposes.

Computer says No.

Edited by statinstoinker

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Guest crashdesk

Apologies. Had trouble with the remember password system, so modelreject is now crashdesk.

Thanks for all the info. Very informative and easy to digest. Those EA's really do play hardball and some are so rude. I won't mention who, but I put in an offer on a house which wasn't even 10% less than the asking price and the EA basically said not to waste his or his clients time. I thought in this climate it was an excellent offer. Oh well. Just trying to arm myself with some facts and the DCV was going to be one. Maybe not so relevant.

Cheers!

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Another guage on true value would be looking at the cost of renting a property and comparing this to a 90% interest only mortgage. Don't forget that rents here generally have rates thrown in :)

Factor in stamp duty, legal fees, buildings insurance, mortgage extras etc and suddenly buying is no joke especially as any purchase will be worth 20% less next Spring

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Guest crashdesk

"buying is no joke especially as any purchase will be worth 20% less next Spring "

I know what your saying, so true. The predicament that I'm in is that there is a house that I love. Bad move getting emotional about a house. Does me no favours. It is currently on at a reasonable price and will probably sell for £145,000.

Has a front and rear garden, garage, 3 bed, 2 reception. I worry that someone will purchase it in the current climate because once prices do go up, I'm sure it's value will be around the £200,000.

Even if the house is 20% less next spring, it would be long term and the prices will go back up. Any advice?

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"buying is no joke especially as any purchase will be worth 20% less next Spring "

I know what your saying, so true. The predicament that I'm in is that there is a house that I love. Bad move getting emotional about a house. Does me no favours. It is currently on at a reasonable price and will probably sell for £145,000.

Has a front and rear garden, garage, 3 bed, 2 reception. I worry that someone will purchase it in the current climate because once prices do go up, I'm sure it's value will be around the £200,000.

Even if the house is 20% less next spring, it would be long term and the prices will go back up. Any advice?

Hi Crashdesk, welcome to the forum ;) What is the rateable value of this property?

I really love a house, it is valued at 250k..... if I buy now I eat into my deposit and need a mortgage.

I leave it a year or more, I see an even nicer proeprty for sale (I might not need a mortgage), all for having a bit of patience.

I have had a mortgage b4, only 80k.... but even that is alot! I watch those property programs on tv, people buying houses at 400k (like they are buying a pint of milk) and I think - where are they getting that kind of money - madness............ for MUD? ;)

Edited by sophia

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"buying is no joke especially as any purchase will be worth 20% less next Spring "

I know what your saying, so true. The predicament that I'm in is that there is a house that I love. Bad move getting emotional about a house. Does me no favours. It is currently on at a reasonable price and will probably sell for £145,000.

Has a front and rear garden, garage, 3 bed, 2 reception. I worry that someone will purchase it in the current climate because once prices do go up, I'm sure it's value will be around the £200,000.

Even if the house is 20% less next spring, it would be long term and the prices will go back up. Any advice?

What makes you think prices will go back up? I'm not saying they won't. I'm just interested to know why you think they will.

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Guest crashdesk

Just looking at all the graphs and stats, at the end of this crash, whenever that may be, history shows that prices do increase. I'm not well versed in housing markets, mortgages etc, so I'm doing my own research and hopefully helpful people like yourselves can steer me clear of ruining my life. :lol:

The rateable value of the house is £110,000, currently on the market for £140,000. Doesn't need any obvious work done , but may need new boiler. You could move in tomorrow.

Even though I'm a First Time Buyer I'm now buying a house as a short term thing. I'm thinking long term living in an area.

Thanks for the advice so far!

Edited by crashdesk

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The predicament that I'm in is that there is a house that I love. Bad move getting emotional about a house. Does me no favours.

If you don't fall in love with the house you want to buy, it ain't the right house for you.

I don't agree with "you might get a similar house for a few grand less"

Its hard if not impossible to get two houses exactly the same, site size, site position, surroundings and so on.

Houses need love to.

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"buying is no joke especially as any purchase will be worth 20% less next Spring "

I know what your saying, so true. The predicament that I'm in is that there is a house that I love. Bad move getting emotional about a house. Does me no favours.

I felt the same in 2007. Was even bidding on a house I 'loved'. Lucky for me I was out bid. Then I did some of my own research which led me to this website. I then became convinced that house prices in Northern Ireland would fall by 60%-70% to make them affordable to average people like nurses, firemen and teachers again. We are still not at the level where average people on average incomes can buy average houses.

It is currently on at a reasonable price and will probably sell for £145,000.

Has a front and rear garden, garage, 3 bed, 2 reception. I worry that someone will purchase it in the current climate because once prices do go up, I'm sure it's value will be around the £200,000.

Even if the house is 20% less next spring, it would be long term and the prices will go back up. Any advice?

I honestly believe that house prices here will never recover to 2007 levels in my lifetime. Part of my research was into economic cycles. The average boom/bust cycle is 14-20 years. The bust phase of the cycle takes on average 3-7 years. We are only 20 months into this bust phase. The earliest we will reach the bottom is Autumn 2010. Though this was an historically large bubble. Therefore, it may take longer to completely bust. Even if you look a the last (much smaller) house price bubble in the UK in 1989. It took 3 years for prices to reach their 'nominal' bottom and 7 years to reach the 'real' inflation adjusted bottom. Basically prices fell for 3 years then did not move for another 4 years. We have not even had 3 full years of falls yet. And like I keep saying this is a much bigger bubble. So if I was you I certainly would not worry about house prices rising anytime soon.

The reason I believe that we will never see house prices at 2007 levels again... The only reason that we saw those prices is because of reckless bank lending i.e. a credit bubble. That reckless bank lending is now being paid for by the taxpayer. It will take along time to pay for this mess and will cause much pain for everyone. We are in the eye of the storm at the moment. To pay for all the credit bubble/bank bailouts we the taxpayer will have to pay higher taxes. Then there will need to be public spending cuts and interest rates will rise too. The credit bubble will not be repeated again in living memory. Therefore, the next bubble in 14-20 years will be much, much smaller.

Do your own research.

I guess it is easier for me. After doing my own research I decided not to look at property again until the end of 2010. I know that it will be worth the wait.

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Guest crashdesk

Mmm. I'm very much a person that thinks with their head, that's why I'm still looking at other properties and may not even purchase on soon, but my heart is telling me to buy. Horrible situation.

The property also has potential, but if I stretch things to get a large mortgage I may never be able to do some renovation and additions.

To cut to the chase, do you think it is a crazy idea to get a house that you really like, that you could live in for a considerable amount of years...happily, if you are only on a salary of £23,000 a year and a partners salary? The mortgage would be for £130,000.

I think I know the answer already. lol

I've so many questions, but don't want to bog down this thread.

Edited by crashdesk

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lol, just stop looking to buy until at least next Spring ;) Don't look at any properties at all, if you are in danger of loving one!

130k is a big mortgage, what if later down the line you or your partner needs to work part-time etc etc.........life cirumstances change, BUT debt is still there at the end of the day.

Then think of re-mortgaging in negative equity, interest rates going through the roof, house prices still falling etc.............

I remember when I had a mortgage of 80k, our mortgage payments per month were over £500, then add on rates, utility bills etc etc........ not much change out of £1000! Then I went on to maternity leave...... and didn't go back to work........... so I know how tight things can get financially - and it is not good..... you soon fall out of love with that house you once loved!!! :P

Edited by sophia

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Mmm. I'm very much a person that thinks with their head, that's why I'm still looking at other properties and may not even purchase on soon, but my heart is telling me to buy. Horrible situation.

The property also has potential, but if I stretch things to get a large mortgage I may never be able to do some renovation and additions.

To cut to the chase, do you think it is a crazy idea to get a house that you really like, that you could live in for a considerable amount of years...happily, if you are only on a salary of £23,000 a year and a partners salary? The mortgage would be for £130,000.

I think I know the answer already. lol

I've so many questions, but don't want to bog down this thread.

I can relate completely. All this talk of rising prices and renewed interest has got me thinking that it might be time to take the plunge. I've seen a house I like (which isn't even on PN bizarrely!) but my head is still telling me now is not the right time. Why?

  • Its spring/summer and there's always more activity/competition now - I'm holding fire until at least the end of the year when things will be deadly quiet again;

  • Seller mentality will have shifted with the recent talk of 'green shoots' - they will probably be less receptive to offers significantly under asking (their renewed optimism is not supported by any fundamentals which is why it will be shortlived);

  • Unemployment is on the up (my mate is waiting on a big layoff announcement at his firm);

  • Most FTBs cant access finance without a sizeable deposit and transaction levels are still tiny. Remember mortgage lending is still down on last year which itself was a disasterous year for housing. Remember house prices are all about the availability of credit not demand-desire for housing!

  • Property is still overpriced by historical measures (even with a deposit of over 50K I'd be taking on a mortgage of 4 times income); I have no desire to destroy my hard earned savings thru buying an asset which might well drop a further 25K. My reward for saving should be a small mortgage and 4 times earnings is by no means small. In fact not too long ago a mortgage of this size would have required special approval!

  • Property is finished as an investment - if your fear is that investors will be back and things will get stoked up again then I'd relax. Investors have had their fingers badly burned. The risk-reward with property has flipped 180 degrees - everyone knows the days of making short term profit from property are over. The fact is that lot of investors became hooked on this easy money. Once the crash has played out future returns from property are like likely to be small and just won't interest them;

Should you buy? Only you know when it feels right. For me, now just doesn't feel like the right time.

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Guest crashdesk

Always good to hear other peoples opinions to help me get grounded. Having a partner that thinks with her heart and loves the house to just throws the balance off slightly.

I'll be keeping my eye on trends in the coming months. Thanks again for the input.

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Only you know when it feels right. For me, now just doesn't feel like the right time.

As you know, I am in a slightly different position from most here. Having sold at the peak in 2007 (dumb luck) and seen 40% falls so far, I am now a 'no chain cash buyer' for most properties. Which is a really strong position to be in. Basically, if I see a house I 'love' there is nothing stopping me buying it. Maybe my fortunate position allows me to remain detached. It will be all my own money going into the purchase of my next property - not the banks money. And if I end up jumping into the market too soon and could have saved myself £20,000 by waiting a year... well £20,000 pays for a lot of holidays. For me this is not about feelings. It is all about financial sense.

Having said all that, I have a feeling that there is a lot of 'pent up supply' that will be hitting the market at the end of next year. So there will be plenty of properties to chose from soon. Only time will tell. Not long to wait now. B)

Edited by Belfast Boy

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Just to touch on the whole DCV thing again. I do believe that the figures are helpful to a point, but one thing I would like to point out is that they do not indicate current value in any way, they are only useful to compare against other properties. The DCV is a line in the sand that allows you to calculate how much the EA has over priced the house.

One property might be advertised at 2x DCV, another might be 1.4x DCV, obviously the 1.4xDCV is better value. But as others have said its not very accurate and many do not update their details after extensions etc, and it takes no account of condition. I actually use it to track property prices, and currently I am seeing alot more properties near 1xDCV, but still a few at 1.4x. The lower prices ones tend to be in need of updating or other EA speak for 'its uninhabital'.

Many here believe that prices will reduce to well below DCV.

Sales volumes are currently very low, and this is because prices are still too high compared with what banks are prepared to lend. Some houses are selling at current prices, because more people are realising they can suddenly afford to buy a house, but these people in their late 20s, who would traditionally be now looking for a second house with more space/ bigger garden etc for the kids or whatever.

Whatever you do, do not super stretch yourself to afford this, a mortgage should be limited to 3x your salary to build in interest rate changes, change in circumstances, patter of tiny feet etc. Remember that even if you have a fixed mortgage interest rates still affect everything else you buy.

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Subby as far as I know rateable value and Domestic capital value is the same thing.

peeps....note the wink at the end of the comment :D

I was in jovial mood at the time due to a few swift ones in work time :ph34r:

extracting the urine....how polite :D

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