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walterg

Ftb - Advice Sought!

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Hi everyone

I'm looking to buy my first property and I've been viewing places for most of this year. Different people tell me different things about whether it's a good time to buy or not, as well as whether I should buy in this area or that area, so I thought I'd see if anyone here has some words of wisdom!

To summarise my requirements: it's just for me, so only 1 room required although 2 is a big bonus. Don't want to be anywhere there's lots of scallywags, e.g. Heaton, Fenham, etc (I'm a snob). Need to be either close to a Metro station or within walking distance of town. Looking to spend up to 125k (ish) but would really like to keep it down towards 100k if I can find a bargain.

I've looked mainly at serviced apartments so far - The Bar, Rialto, Hanover Mill, Ochre Yards, etc. The prices are generally lower on these places but I'm put off by the service charges and ground rent. In addition, I've come to the conclusion that these types of property are poor investments - they won't retain value half as well as flats in residential areas, i.e. Tyneside flats etc. So, I'm now starting to look at places in Jesmond, Gosforth and Sandyford.

My first question is - am I right to ditch my plans to purchase a serviced apartment?

Second question - is it wise to buy now? Or should I wait? I can afford to pay rent for as long as I need to, but that obviously means I'm losing a lot of money each month...

Third question - are there nice areas further out than Gosforth and Jesmond? I've heard mentions of Benton and Kingston Park areas but I'm not from the North East so I need educating!

Any advice would be massively appreciated. Thanks for your time :)

Walter

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Hi everyone

I'm looking to buy my first property and I've been viewing places for most of this year. Different people tell me different things about whether it's a good time to buy or not, as well as whether I should buy in this area or that area, so I thought I'd see if anyone here has some words of wisdom!

To summarise my requirements: it's just for me, so only 1 room required although 2 is a big bonus. Don't want to be anywhere there's lots of scallywags, e.g. Heaton, Fenham, etc (I'm a snob). Need to be either close to a Metro station or within walking distance of town. Looking to spend up to 125k (ish) but would really like to keep it down towards 100k if I can find a bargain.

I've looked mainly at serviced apartments so far - The Bar, Rialto, Hanover Mill, Ochre Yards, etc. The prices are generally lower on these places but I'm put off by the service charges and ground rent. In addition, I've come to the conclusion that these types of property are poor investments - they won't retain value half as well as flats in residential areas, i.e. Tyneside flats etc. So, I'm now starting to look at places in Jesmond, Gosforth and Sandyford.

My first question is - am I right to ditch my plans to purchase a serviced apartment?

Second question - is it wise to buy now? Or should I wait? I can afford to pay rent for as long as I need to, but that obviously means I'm losing a lot of money each month...

Third question - are there nice areas further out than Gosforth and Jesmond? I've heard mentions of Benton and Kingston Park areas but I'm not from the North East so I need educating!

Any advice would be massively appreciated. Thanks for your time :)

Walter

1. Yes. Don't buy anything. Wait until prices drop as they certainly will. You will be abale to buy a 2 up 2 down instead in a few years. Just keep saving. Buy a few gold and silver coins. The NE is far too dependant on the public sector. Whatever govt says, it will be hurt more than averagely by cuts. Prices boomed there on the basis of no tomorrow from around 2001 and they will take a hit over the next couple of years.

2. NO. You are losing nothing by renting in the current market. If you buy and the home does not appreciate more than inflation you are losing and have to pay maintenance costs. If it falls, you will lose even more. When you do buy...location, location. Buy the cheapest property in the best located street you can afford, which needs doing up.

Good luck!

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1. Yes. Don't buy anything. Wait until prices drop as they certainly will. You will be abale to buy a 2 up 2 down instead in a few years. Just keep saving. Buy a few gold and silver coins. The NE is far too dependant on the public sector. Whatever govt says, it will be hurt more than averagely by cuts. Prices boomed there on the basis of no tomorrow from around 2001 and they will take a hit over the next couple of years.

2. NO. You are losing nothing by renting in the current market. If you buy and the home does not appreciate more than inflation you are losing and have to pay maintenance costs. If it falls, you will lose even more. When you do buy...location, location. Buy the cheapest property in the best located street you can afford, which needs doing up.

Good luck!

Thanks for the advice, really appreciate it! So if I rent a flat for 12 months at something in the region of £500/month, I'd need the price of whichever property I buy to drop by at least 6 grand, which is about 5%. Sounds like a pretty fair bet!

P.S. Random question - what are "bulls" and "bears" in the context of this forum?

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P.S. Random question - what are "bulls" and "bears" in the context of this forum?

Bears think that property is overvalued and will eventually go down in price

Bulls are idiots ;) .. oh ok then, they think property always only ever goes up in price

Edited by Rozza

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Bears think that property is overvalued and will eventually go down in price

Bulls are idiots ;) .. oh ok then, they think property always only ever goes up in price

Bears think property is overvalued? Well then I must be a bea... wait, bulls are idiots? Oh well now I'm torn :wacko:

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Bears think property is overvalued? Well then I must be a bea... wait, bulls are idiots? Oh well now I'm torn :wacko:

I know what you mean! I want to change my view to flamingo but it wont let me :lol:

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Thanks for the advice, really appreciate it! So if I rent a flat for 12 months at something in the region of £500/month, I'd need the price of whichever property I buy to drop by at least 6 grand, which is about 5%. Sounds like a pretty fair bet!

P.S. Random question - what are "bulls" and "bears" in the context of this forum?

Well, I don't suggest comparing the price of rent as a multiple of a property price fall, quite as you do. You will have to pay to live somewhere anyway. If you buy there will be a mortgage each month. The question is whether you think that paying a mortgage for an asset which is more likely to fall in value would be wiser than waiting and getting somewhere better later. I think waiting is your best bet even if it's 2 years. You will still be alive and if things were to go really pear shaped in the world economy and here, you would not be stuck with a 'concrete necklace' of a mortgage heading towards negative equity. You will sleep better once you just get on with this decision.

Query..is plummet expert wrong? I could be, but the indications (no time for 4 page economic paper today) are all there to suggest property rises are going to be very scarce starting from now and falls much more likely. In 1989 they laughed and scoffed at me as I told them it would happen. In 2004 they told me houses would never go up like before. I almost believed it and delayed purchase to 1996. Then I sold in Dec 2006. Just as well.

Edited by plummet expert

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Walterg,

Obviously this site is inhabited mostly by people who believe that property prices will be going down. That said, I am one of them.

The idea that rent is dead money is a myth, particularly if you take into account that over 25 years about 60% if not more - depending on interest rates -of mortgage repayments is interest.

The only thing holding property prices up is historically low interest rates, which will not last forever.

On a different note: of the three places you mention as potential areas, I would go for Sandyford. Gosforth and Jesmond reached their hights a long time ago, but Sandyford is an area which I believe will appreciate over the long term more than the other two.

Good luck

Durham Lad

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I see what you mean about Sandyford....but personally I wouldn't choose to live there again (I did for 3 years, post-student)

The main parts are absolutely crawling with students.

There's very little in the way of local amenities (though I appreciate it's fairly close to town and Byker). If you just want to pop out and grab a paper or pick up some light shopping there's not much choice.

Very little parking available.

Horrible little estate bang in the middle.

There are a few nice streets, but these are the minority tho.

Good luck though!

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Thanks for all the advice guys, really appreciate it!

Thanks in particular for the advice on Sandyford - contrasting opinions! It is indeed full of students, although I'm not too bothered about this as I'm still in my twenties and I find them harmless enough (as long as I can get a good night's sleep!). My only concern regarding the local population is undesirables - as Mr 0.01% says, there's a horrible estate (I assume you mean the big tower block?) in Sandyford that puts me right off every time I see it. I know a couple of people who have been mugged/threatened with knives in Sandyford, which isn't nice. Having said all that, I've never actually lived there myself. It's a step up from Heaton, not too expensive and within walking distance of town. Interesting that you think it will appreciate over time, Durham Lad. It wouldn't surprise me but they'd definitely have to get rid of that horrible estate first - if they did that, the place would have far more appeal and potential for appreciation. People often say, like you, that Jesmond and Gosforth have had their day but I can't quite see that - where else are people going to go? I can see them being the most desirable areas of central Newcastle for a long time, although, as you say, Sandyford certainly has a lot of potential.

Unlike Sandyford, I've lived in both Gosforth and Jesmond. The latter, like Sandyford, is full of students, although I find it much more pleasant than Sandyford - it's greener and has a bit more to offer in terms of shopping, eating/drinking and transport links. You also get far less undesirables - if any. The most threatened or uncomfortable I ever felt living in Jesmond was when a scallywag asked me for change then swore at me when I said no! That was just one incident in 3 years of living in Jesmond.

I found Gosforth to be quite like Jesmond, but with far less students. I've heard a lot of people say it's full of students but I never got this impression while living there. The shopping, eating/drinking and transport options are greater than Jesmond, although it's a bit further from town so takes longer to walk.

So, Jesmond or Gosforth would get my vote but Sandyford is certainly an option. Interesting to read other people's opinions on places!

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Somethings I would say :

Apartment prices can change a lot. In fact in the last crash it was new build appartments and townhouses that seemed to suffer the most, especially in big city centres where there was significant oversupply. I think the prices are still well down on peak for many city centres.

In my area though prices on apartments are still relatively high. In fact most places where I am looking (a small SE town) they are being marketed at 10% or so over the 2007 price. The result of course is that they are not selling. It remains to be seen whether the large increase in properties on the market in the few weeks up to the budget announcement will cause prices to drop.

I actually want an apartment, but I want a large one. Although I live on my own at the moment, that could change. Bringing up a family in a 1 bed apartment could be a nightmare, and if I was forced to sell after the market dropped I could lose a lot of money.

I want a big place so that if the prices do reduce further I can stay in it for a long time until prices recover, so I'm looking at 3 bed places. A loss is only a loss when you crystallise it, so a three bed place should keep me happy for a good few years even if my life circumstances change. This means that I'll be able to sell the place when I want to, and not be forced into NE by having to sell in a crashed market.

I'm not in a rush to buy, after all in apartment terms its little different from renting. I'm currently looking at properties that are displaying all the forced seller signals and in a month or so's time I might start putting in some low ball offers to see whether anyone bites. The key is not to be in a rush and not to fall in love with any particular property.

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Thanks for the advice, really appreciate it! So if I rent a flat for 12 months at something in the region of £500/month, I'd need the price of whichever property I buy to drop by at least 6 grand, which is about 5%. Sounds like a pretty fair bet!

P.S. Random question - what are "bulls" and "bears" in the context of this forum?

You would be paying a mortgage presumably of which only a small amount would go towards paying off the capital so the actual amount of the drop needed would be closer to 1%

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The mortgage would be around 25-50% of the total value. So...

Mortgage £100-150 per month

Rent £500-600 per month.

Properties for sales = not many.

Properties for rent = quite a few.

Tricky maths, still struggling to make a decision! I guess there might be more properties to choose from in a year? :huh:

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Have you thought about the coast ((West)Monkseaton, Whitley Bay Tynemouth)? That's where I will be looking.

As for prices, I'm still a little unconvinced about massive falls, however if they go down 8% they will go down 25% (if you see what I mean). The prices here are held up only by confidence. No real industry in the NE and if public sector takes a hit and confidence wavers then TIMBER!

Phoney

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Have you thought about the coast ((West)Monkseaton, Whitley Bay Tynemouth)? That's where I will be looking.

As for prices, I'm still a little unconvinced about massive falls, however if they go down 8% they will go down 25% (if you see what I mean). The prices here are held up only by confidence. No real industry in the NE and if public sector takes a hit and confidence wavers then TIMBER!

Phoney

I've thought about it but not sure about those areas - are they pleasant? I've seen one or two attractive looking properties around the Tynemouth area but, when I look on Street View, there's always a horrible estate lurking around the corner. I also worked in nearby North Shields for a couple of years and let's just say it wasn't the most pleasant area I've ever encountered!

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All those areas are nice. Like most places there there's always a few rough places hidden within but I'd have absolutely no problem living in any of those generally.

Only point I'd add is that the near seaside would prop up prices a bit more there (IMO), so if they do see falls they might not be quite as stark as other areas. Happy to be proven wrong tho.

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I've seen one or two attractive looking properties around the Tynemouth area but, when I look on Street View, there's always a horrible estate lurking around the corner.

...as I've eluded to somewhere else on the N.E. forums this goes for most of tyne and wear, but quite a lot of "north of the river" has this odd quality where supposed good areas can also look like a dog's back side with equally delightful looking residents.

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Agree with the comments. North Tyneside is a bit of a mixed bag. However as long as you are between north sheilds and shiremoore it never gets that bad.

Waltberg, you could fire a few rightmove links here and see what people think. Personally I would avoid anything just off Hillshead road (even though it's Monkseaton).

Phoney

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Think I'm going to avoid coastal areas for now - main reason being that I don't want to have to commute to town from miles away. Jesmond/Gosforth/Sandyford are walkable distance and the Metro only takes a few minutes, so I think I'll stick to those... just need to decide whether to buy or rent! Argh :wacko:

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  • 140 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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