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twinkle

Schadenfreude

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Some of you may recall I started a thread a few weeks back on the day following the interest rate cut, regarding my colleague's glee that this would kick start another boom, so that she could sell her flat for an even more extortionate sum than she paid for it. She didn't believe me when I said that prices had fallen after the last boom and was put out when I pointed out any future boom would make her next purchase even more expensive. The thread meandered off topic to discuss whether going to university automatically meant you were intelligent.

Anyway, last night she had her flat valued. This morning she announced that the estate agent said nothing was selling and discounts of £20-30K are being taken. The upshot being, her flat is only worth £5K more than she paid for it 18 months ago. She was expecting it to be worth £25-35K more, as she has been tellingme for the past year that it's a highly desirable area and prices just keep going up. This is a gorgeous (but bijou) one bed conversion flat in an imposing Edwardian terrace in Hammersmith.

I didn't even feel glad, just relieved that someone else has seen sense at last. We then went on to have a lengthy discussion about the state of the market and she agreed with just about everything I said!!!! Far cry from a few weeks ago! It seems one has to hear it from an EA or read it on the news before one can change one's opinion! How many more out there?

Edited for spelling mistake!

Edited by twinkle

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Can't help but feel that this is going to bring misery to tens of thousands of people, but as someone who has in all effect been priced out of the market it is also gratifying.

Property near me that I've been following has dropped from 155k to 135k in 6 months. Mind you, it was bought for 90k in 2001 so there's no distress there yet.

People who bought in 2004/2005 will be suffering soon, dipping into NE, and potentially struggling with payments if there's a continued upward pressure on interest rate.

I really think there's a horror scenario waiting to happen.

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The upshot being, her flat is only worth £5K more than she paid for it 18 months ago.

But she hasn't sold it yet, so worth means nothing really. In reality, it might actually be worth 5k less than she paid. Or 10k, or 20k, or...

Nomadd

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And the agent was probably only telling her the property was worth £5K more in order to get her to sign up with him.

I pity people who bought last year. PArtly because I was almost one of them!!

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The upshot being, her flat is only worth £5K more than she paid for it 18 months ago.  She was expecting it to be worth £25-35K more

Assuming the£5k over what she paid was the asking price recommended, was she aware that she probably wouldn't even get that and therefore in fact her property is worth less?

How about negative equity? Any concerns there?

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I doubt she's worried about NE because they had about £75K of equity from the sale of their first flat, which was bought before the boom. But there must be hundreds of FTB's and others over exposed to the market through BTL, etc. that will be cr@pping themselves when they realise their properties aren't worth what they paid for them. Even if I had a lot of unearned equity, I'd still be narked off at finding my house had lost value, but it's all swings and roundabouts, or should that be smoke and mirrors?

Edited by twinkle

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Some of you may recall I started a thread a few weeks back on the day following the interest rate cut, regarding my colleague's glee that this would kick start another boom, so that she could sell her flat for an even more extortionate sum than she paid for it.  She didn't believe me when I said that prices had fallen after the last boom and was put out when I pointed out any future boom would make her next purchase even more expensive.  The thread meandered off topic to discuss whether going to university automatically meant you were intelligent.

Anyway, last night she had her flat valued.  This morning she announced that the estate agent said nothing was selling and discounts of £20-30K are being taken.  The upshot being, her flat is only worth £5K more than she paid for it 18 months ago.  She was expecting it to be worth £25-35K more, as she has been tellingme for the past year that it's a highly desirable area and prices just keep going up.  This is a gorgeous (but bijou) one bed conversion flat in an imposing Edwardian terrace in Hammersmith.

I didn't even feel glad, just relieved that someone else has seen sense at last.  We then went on to have a lengthy discussion about the state of the market and she agreed with just about everything I said!!!!  Far cry from a few weeks ago!  It seems one has to hear it from an EA or read it on the news before one can change one's opinion!  How many more out there?

Edited for spelling mistake!

Huge swathes of West London have seen stagnant prices since late 2003. It was funny to watch each area have a boom and then once prices had reached a certain level the next area out would have it's boom in turn.

Unless interest rates change significantly the better parts of London will stay stagnant for a good few years.

Hammersmith is a great place to live if you can afford it.

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Can't help but feel that this is going to bring misery to tens of thousands of people, but as someone who has in all effect been priced out of the market it is also gratifying.

Property near me that I've been following has dropped from 155k to 135k in 6 months.  Mind you, it was bought for 90k in 2001 so there's no distress there yet.

People who bought in 2004/2005 will be suffering soon, dipping into NE, and potentially struggling with payments if there's a continued upward pressure on interest rate. 

I really think there's a horror scenario waiting to happen.

A developer around the corner from where I am (SW London) has put flats in a newly converted victorian house up for sale. 2 bed flat - £380k. Good luck!

An identical house converted last year and tried marketing similar properties for £350k initially. The 2 bed flats that he managed to sell went for around £260k in the end (after being on the market for about 8 months).

The developer is in for a very rude awakening I fear. It's unbelievable that some people are still trying to set new highs in the market - what planet are they on?

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Why should FTB cr@p themselves?

So long as they can afford the mortgage and didn't buy with the primary aim of making profits on HPI then if prices go down it is of little consequence.

It is the BTL who should be worried or those who bought purely to make money from the investment.

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Guest struthitsruth
So long as they can afford the mortgage

. . . a key phrase

if they arrive at a point where they can't, what options would they have ?

:huh:

NE takes some nerve to live with, don't you think ?

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It's unbelievable that some people are still trying to set new highs in the market - what planet are they on?

Saw something familiar where I am.

They tried to sell a tired 2-bed flat for £270K. The flat was located above the local KFC and nightclub. It is opposite one of the busier bars and is a horrific location unless you want to live within metres of rats/vomit/spilt blood.

I notice it has now gone under offer.

Asking price is now £210K(!) which considering how badly located it is is probably fair.

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Why should FTB cr@p themselves?

So long as they can afford the mortgage and didn't buy with the primary aim of making profits on HPI then if prices go down it is of little consequence.

I meant if they want to leverage themselves up for their next property, and also those that have bought with 5% deposit or 100% mortgage. However, the difference maybe no more than moving up in a bull market. The idea of "losing" money doesn't appeal to many!

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I meant if they want to leverage themselves up for their next property, and also those that have bought with 5% deposit or 100% mortgage.  However, the difference maybe no more than moving up in a bull market.  The idea of "losing" money doesn't appeal to many!

The days of leveraging up are DEAD. They wont be back for 5 years+.

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So long as they can afford the mortgage and didn't buy with the primary aim of making profits on HPI then if prices go down it is of little consequence.

Unless they want to move for any reason, then that negative equity one-bed flat becomes a huge brick and mortar millstone around their neck.

And, frankly, anyone should be concerned about having sold themselves into slavery for a decade or more by paying 150k for a flat that's worth 50k.

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Guest magnoliawalls
I didn't even feel glad, just relieved that someone else has seen sense at last.  We then went on to have a lengthy discussion about the state of the market and she agreed with just about everything I said!!!!  Far cry from a few weeks ago!  It seems one has to hear it from an EA or read it on the news before one can change one's opinion!  How many more out there?

It is strange how most people don't seem to realise that expert = vested interest.

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Can't help but feel that this is going to bring misery to tens of thousands of people, but as someone who has in all effect been priced out of the market it is also gratifying.

10,000's of jobs are waltzting abroad every largely thanks to this insane bubble which over an extended time has massively exacerbated the competitive advanatge of the likes of India and China. I bet most of those are none too happy about the situation.

Nobody seems to mention that in the press or talk about it at the BOE.

Don't feel guilty for other people's mistakes and their ****-eyed view of a globalized economy.

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In the property game, EVERYBODY is a vested interest one way or another.

True, but sections of the population believe that so-called experts in the media are unbiased and are looking out for the best interests of the buyer.

Misinformation is power ;)

AndrewR

Edited by AndrewR

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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