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House Price Crash Forum

Is There Anyone In A Worse Position?


zoxx
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It is amazing how much damage the property market has done.

I have written about this before, someone I know came into £700k and rushed out an bought a £1.3m house, with a new mortgage deciding they could sell the old house later. New house deal signed late 2007, move in about 6 months later as they had a delayed completion.

Meanwhile old house fails to sell, so they decided to let it and have problems with bad tenants.

Anyhow, the original house is now under offer, but £250k below their original asking price. Meanwhile and this is where the damaged has occurred, it is plainly apparently that the house they bought was massively overpriced. The originally asking price was something like £1.1m and the £1.3m came about from a bidding war. Other houses in the area (perhaps without the extension and loft conversion) are not even now selling for £750k, so I estimate their new house were it put on the market today might be advertised at £850k and perhaps get £775k.

So by my reckoning that's a loss off (£1.3M - £775K) + £250K = £775K in just 18 months.

The market can't "do damage".

People can individually do damage to their prosperity by paying too much for somewhere, or borrowing more than they can really afford.

"The market" is just the sum total of lots of people buying and selling houses.

Fools and their money are, as they say, soon parted.

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