Has Property Madness Returned

[Mikhail Liebenstein]

Guys please hear me out on this and no abuse, as I just again trying to put down some information and facts that have occured to me individually.

As some of you know I took the plunge late last year and got a house at a knock down price, £750k for a house that the year before sold for £900k, and others on the road going for £960k with identical configs at the heights of 2007.

Well when we bought we got a valuation done and it came in £850k, needless to say that was quickly hushed up by us as we new we had the vendor (a developer who had part-exed the house) was in serious financial troubles and needed the money.

Well I've just had a valuation done as I had started to contemplate STR again and its come in at £985k. Somehow I can't see believe I have made a profit of close on £235k in less 6 months. Admittedly it is a nice house, good size and a double height family room and were it a character house with a bit more land it would be something like £1.3m, but it doesn't quite make that in my book.

So my conclusion is ......bl@@dy estate agents. What do they think I am going to do, go "ooohhh I've been so smart and savvy, must now be time to crystalise my profit" then put the house on the market with them for 12 months whilst no one shows any interest.

How come estate agents don't seem to have learnt?

[SHERWICK]

Guys please hear me out on this and no abuse, as I just again trying to put down some information and facts that have occured to me individually.

As some of you know I took the plunge late last year and got a house at a knock down price, £750k for a house that the year before sold for £900k, and others on the road going for £960k with identical configs at the heights of 2007.

Well when we bought we got a valuation done and it came in £850k, needless to say that was quickly hushed up by us as we new we had the vendor (a developer who had part-exed the house) was in serious financial troubles and needed the money.

Well I've just had a valuation done as I had started to contemplate STR again and its come in at £985k. Somehow I can't see believe I have made a profit of close on £235k in less 6 months. Admittedly it is a nice house, good size and a double height family room and were it a character house with a bit more land it would be something like £1.3m, but it doesn't quite make that in my book.

So my conclusion is ......bl@@dy estate agents. What do they think I am going to do, go "ooohhh I've been so smart and savvy, must now be time to crystalise my profit" then put the house on the market with them for 12 months whilst no one shows any interest.

How come estate agents don't seem to have learnt?

Where in London is it?

[LuckyOne]

Guys please hear me out on this and no abuse, as I just again trying to put down some information and facts that have occured to me individually.

As some of you know I took the plunge late last year and got a house at a knock down price, £750k for a house that the year before sold for £900k, and others on the road going for £960k with identical configs at the heights of 2007.

Well when we bought we got a valuation done and it came in £850k, needless to say that was quickly hushed up by us as we new we had the vendor (a developer who had part-exed the house) was in serious financial troubles and needed the money.

Well I've just had a valuation done as I had started to contemplate STR again and its come in at £985k. Somehow I can't see believe I have made a profit of close on £235k in less 6 months. Admittedly it is a nice house, good size and a double height family room and were it a character house with a bit more land it would be something like £1.3m, but it doesn't quite make that in my book.

So my conclusion is ......bl@@dy estate agents. What do they think I am going to do, go "ooohhh I've been so smart and savvy, must now be time to crystalise my profit" then put the house on the market with them for 12 months whilst no one shows any interest.

How come estate agents don't seem to have learnt?

It is a nice dilemma to have.

1. Take 175k in free money and wait for the 1.3m house to become a 900k house. From what I can recall, you have "traded" houses well before. You have the chance to do so again.

2. Stay where you are safe in the knowledge that your "in price" is well below 700k (again from what I can recall about your previous "trades") and that you are isolated from a drop of 40% or more from the current valuation.

Personally, I think that you have timed the intermediate bottom well. It could be worthwhile trading recent price action as a dead cat bounce if you could be bothered. Moving and "trading" is a big hassle.

[headrow]

It is a nice dilemma to have.

1. Take 175k in free money and wait for the 1.3m house to become a 900k house. From what I can recall, you have "traded" houses well before. You have the chance to do so again.

2. Stay where you are safe in the knowledge that your "in price" is well below 700k (again from what I can recall about your previous "trades") and that you are isolated from a drop of 40% or more from the current valuation.

Personally, I think that you have timed the intermediate bottom well. It could be worthwhile trading recent price action as a dead cat bounce if you could be bothered. Moving and "trading" is a big hassle.

If it was me i'd sell up and buy a mansion in Yorkshire with 20 acres and a small flat in London.

[crashpope]

As I am sure you don't need to be told, a valuation of £985k is not a sale at £985k.

If you're happy there and consider it a good deal - stay there.

Half the actual house won't vanish when the pound tanks.

[Tonkers]

If it was me i'd sell up and buy a mansion in Yorkshire with 20 acres and a small flat in London.

Hey! That would make a GREAT TV show!

[porca misèria]

If it was me i'd sell up and buy a mansion in Yorkshire with 20 acres and a small flat in London.

Ugh.

If I had the money for fantasy-property, it wouldn't go anywhere near London. Maybe the small flat in Venice, and the country house somewhere up in the Dolomites or Tyrol.

[jono2000]

thing is you may have missed the opportunity.

i bought in oct 09 a repo flat in london which needed refurb.

It sold after 6 weeks on market for 74% of the 2007 price. In this case I'm not sure the 2007 price was "honest", I'm suspecting cashbacks or some such chicanery.

So I'd say a "selling" price is around three quarters of the 2007 high water mark.

problem is that all happened in snowy jan\feb - my estate agent says its a bit quiet right now, and so do others i've spoken too. i reckon the bears will have the day at least until the election.

ps its much much slower to shift high cost properties than cheapo flats i deal with.

[The Masked Tulip]

There is an area I am looking at in S'sea - asking prices last year were about 260K to 300K. All are now around the 350K mark. Nuts.

[Mikhail Liebenstein]

Where in London is it?

Surrey. Not far from Dorking and Guildford.

[Mikhail Liebenstein]

As I am sure you don't need to be told, a valuation of £985k is not a sale at £985k.

If you're happy there and consider it a good deal - stay there.

Half the actual house won't vanish when the pound tanks.

I agree 100%

[porca misèria]

There is an area I am looking at in S'sea - asking prices last year were about 260K to 300K. All are now around the 350K mark. Nuts.

In swansea????

Are you sure you don't mean the Gower at the very least?

[Guest DissipatedYouthIsValuable]

Have I missed the boat again?

[the flying pig]

was the first figure a surveyor's 'valuation' and the second one plucked out of the air by an EA?

[The Masked Tulip]

In swansea????

Are you sure you don't mean the Gower at the very least?

A suburb in Swansea West. Five years ago 160K would have got you a nice house in that suburb - 220 got you a fantastic house.

[Mikhail Liebenstein]

Personally, I think that you have timed the intermediate bottom well. It could be worthwhile trading recent price action as a dead cat bounce if you could be bothered. Moving and "trading" is a big hassle.

Funnily enough my conclusion on bottoms is that to a degree you have to make your own bottom.

Having STRed just as Northern Rock went up and having carried out viewings throughout 2007-2009, I was totally unimpressed with the quality of stock and stupid prices people were asking. In the end I got lucky finding a developer needing to offload a part exchanged property their had on their books. Unforuntately a lot of the other vendors were mildly deluded babyboomers, who had little income but sat on a perceived tonne of equity. Many of you will remember anecodotes about lemon faced middle age women and their assumption that you should pay the asking price so that they could retire in comfort - well that was 100% spot on and remains true now.

The big difference is between asking price and sellling price. Good deals still go through and some not so good ones also, but the market remains weak and will do so until the asking prices and selling prices converge a bit more. Clearly only 2 ways that can happen.

So I will need to work on the wife to see if we can STR again - but it is looking tempting.

[Mikhail Liebenstein]

was the first figure a surveyor's 'valuation' and the second one plucked out of the air by an EA?

Yep, though first one was 6 months ago.

[the flying pig]

Yep, though first one was 6 months ago.

well, that's a big part of your answer. one would always expect an EA to come out much higher. it's their job, to win instructions. another part of the answer is that london selling prices [to the extent that anything actually has sold] have risen quite a bit in six months according to the LR, by, how much, well over 5%, maybe as much as 10%??

but a more general point is that even chartered surveyors are absolute quacks, their 'qualifications' roughly on a par with ones that come free with cereal packets. when valuing a property they make it seem really scientific by using laser measurering tools etc but the actual numbers they come up with are the product of little more than a few google searches.

a year or two ago i was getting my leasehold flat for the purpose of a lease exension, for various complicated reasons there were two valuations done.

the first one was done on my behalf by a surveyor who had a duty of care only to me and who therefore was instructed, within the limits of their professional integrity or whatever, to come up with a bearish survey, i.e. to produce a low value.

the second surveyor had a joint duty of care to both me and the freeholder and as such was instructed to give the fairest, most straight-down-the line, valuation possible.

neither surveyor knew that the other had been instructed. they did their surveys on different days of the same week.

the second one came in 5-10% lower then the first...

Edited February 27, 2010 by the flying pig

[Mikhail Liebenstein]

well, that's a big part of your answer. one would always expect an EA to come out much higher. it's their job, to win instructions. but a more general point is that even chartered surveyors are absolute quacks, their 'qualifications' roughly on a par with ones that come free with cereal packets. when valuing a property they make it seem really scientific by using laser measurering tools etc but the actual numbers they come up with are the product of little more than a few google searches.

a year or two ago i was getting my leasehold flat for the purpose of a lease exension, for various complicated reasons there were two valuations done.

the first one was done on my behalf by a surveyor who had a duty of care only to me and who therefore was instructed, within the limits of their professional integrity or whatever, to come up with a bearish survey, i.e. to produce a low value.

the second surveyor had a joint duty of care to both me and the freeholder and as such was instructed to give the fairest, most straight-down-the line, valuation possible.

neither surveyor knew that the other had been instructed. they did their surveys on different days of the same week.

the second one came in 5-10% lower then the first...

It was partly given away in the title of my post. I would probably value the house at £850-875k given the old valuation and the fact that the market has been inflated by queasing since the middle of last year. So as you say a lot of evidence that EAs are being really dumb, despite the crash, some people never learn.

[MediaTrash]

Has property madness returned ?

A 27 yr old girl from my office is intending to buy a £500-600K place in Fulham, West London. She earns under £30K, her dad is going to give her £100K deposit and act as guarantor. She plans to rent out a room or two to friends. Her boss told her to get an interest only mortgage.

WTF?

[Sibley's Love Child]

Has property madness returned ?

A 27 yr old girl from my office is intending to buy a £500-600K place in Fulham, West London. She earns under £30K, her dad is going to give her £100K deposit and act as guarantor. She plans to rent out a room or two to friends. Her boss told her to get an interest only mortgage.

WTF?

What could possibly go wrong? Provided her annual income increases by 150% per year she'll be laughing.

In any event; she's 'living the dream'...

Edit: Perhaps NR are still doing those 'All Together' mortgages; in which case she and three of her friends can all share that dream.

Edited February 27, 2010 by Sibley's Love Child

[catmandu]

Has property madness returned ?

A 27 yr old girl from my office is intending to buy a £500-600K place in Fulham, West London. She earns under £30K, her dad is going to give her £100K deposit and act as guarantor. She plans to rent out a room or two to friends. Her boss told her to get an interest only mortgage.

WTF?

Seems perfectly reasonable to me - she gets a property with no financial risk. Her dad on the other hand pays 100K, takes all the risk and gets nothing in return. Wish I had a gullible relative who would do that - I would buy too.

[tim123]

There is an area I am looking at in S'sea - asking prices last year were about 260K to 300K. All are now around the 350K mark. Nuts.

Why are you looking in Southsea?

tim

[Mikhail Liebenstein]

Has property madness returned ?

A 27 yr old girl from my office is intending to buy a £500-600K place in Fulham, West London. She earns under £30K, her dad is going to give her £100K deposit and act as guarantor. She plans to rent out a room or two to friends. Her boss told her to get an interest only mortgage.

WTF?

Blimey did I read that correctly.

So she wants to borrow £400-500k. Er that'll be about £2200-£2700 per month on an interest only mortgage.

How much does someone on £30k take home, less than that, is about £1800 per month?

[MediaTrash]

What could possibly go wrong? Provided her annual income increases by 150% per year she'll be laughing.

In any event; she's 'living the dream'...

Edit: Perhaps NR are still doing those 'All Together' mortgages; in which case she and three of her friends can all share that dream.

thing is I'm starting to think I'm the crazy one for looking to STR - an old fella in the office (asset millionnaire) thinks the London property market is bullet proof because russians lapping up the weak pound and bonussed up bankers are scooping up anything prime.