This Place Was Purchased For About 175K In 2007

[MinceBalls]

http://www.rightmove.co.uk/property-for-sale/property-31479212.html

Friends of my partner (a couple) purchased a pokey little 1 bed (basement) flat near Victoria Park , East London for 175K during the heady days of 2007 (I said they were mental at the time). They spent 30K on it during a 4 month period and when they finished then decided it was too small for them to live in so they rented it out.

They have finally decided to sell it and were going to put it on the market for 250K. They spoke to a local EA who said 'try it out at 280K, someone might bite at that price'.

I didn't realise that house prices had gone up so much since the so called top of the market in 2007! We must all be on the gravy train again without anyone telling me.

So EA’s haven’t learnt a thing have they? Even if they make a bit of profit on top of their total expenditure – taking into account that house prices have dropped since then they should really only expect to put it on for 230K with a hope to get their money back – 200K*. How the hell did the EA come to the conclusion that 280K (30-40% above 2007 prices) was about right?

If someone buys that place for more than 220K I will elope.

IMO, we are nowhere near the panic, anger, capitulation phase – we have a long way to go before we reach that and anyone calling the end to 'back to normal' phase is premature.

*Edit: I mean HOPE to get their 200K back, in my opinion, 130K might be realistic but somewhere between 175-200 and they will be lucky. But 280? Christ on a bike!

Edited October 20, 2010 by MinceBalls

[VeryMeanReversion]

A neighbour bought a couple of years ago for £475K, got planning permission to convert an outbuilding into extra living accommodation and it's now up for £425K.

It was a planned development opportunity but divorce got in the way.

There are some people out there that can take a loss.

[cardiffone]

http://www.rightmove.co.uk/property-for-sale/property-31479212.html

Friends of my partner (a couple) purchased a pokey little 1 bed (basement) flat near Victoria Park , East London for 175K during the heady days of 2007 (I said they were mental at the time). They spent 30K on it during a 4 month period and when they finished then decided it was too small for them to live in so they rented it out.

depends a lot on what they spent 30k on ( 30k of you own work is worth about 60-100k of a builders work ) and how cheep they bought the property in comparison to the market in 2007.

Seems a lot for a one bed though...

[hedgefunded]

Friends of my partner (a couple) purchased a pokey little 1 bed (basement) flat near Victoria Park , East London for 175K during the heady days of 2007 (I said they were mental at the time). They spent 30K on it during a 4 month period and when they finished then decided it was too small for them to live in so they rented it out.

They have finally decided to sell it and were going to put it on the market for 250K. They spoke to a local EA who said 'try it out at 280K, someone might bite at that price'.

Let us know when someone buys it for that price. Until then they could be asking £400k and you'd be even more angry.

[feed]

http://www.rightmove.co.uk/property-for-sale/property-31479212.html

Friends of my partner (a couple) purchased a pokey little 1 bed (basement) flat near Victoria Park , East London for 175K during the heady days of 2007 (I said they were mental at the time). They spent 30K on it during a 4 month period and when they finished then decided it was too small for them to live in so they rented it out.

They have finally decided to sell it and were going to put it on the market for 250K. They spoke to a local EA who said 'try it out at 280K, someone might bite at that price'.

I didn't realise that house prices had gone up so much since the so called top of the market in 2007! We must all be on the gravy train again without anyone telling me.

So EA’s haven’t learnt a thing have they? Even if they make a bit of profit on top of their total expenditure – taking into account that house prices have dropped since then they should really only expect to put it on for 230K with a hope to get their money back – 200K*. How the hell did the EA come to the conclusion that 280K (30-40% above 2007 prices) was about right?

If someone buys that place for more than 220K I will elope.

IMO, we are nowhere near the panic, anger, capitulation phase – we have a long way to go before we reach that and anyone calling the end to 'back to normal' phase is premature.

*Edit: I mean HOPE to get their 200K back, in my opinion, 130K might be realistic but somewhere between 175-200 and they will be lucky. But 280? Christ on a bike!

Friend bought a place in Bow at 250, at the very peak, almost to the day.

Valued at 200 at the bottom, clawed some back and stands at about 220 today

Bow hasn't bounced up on 2007.

But then the 175 doesn't sound too terrible for 2007, so maybe they bought well

[MinceBalls]

depends a lot on what they spent 30k on ( 30k of you own work is worth about 60-100k of a builders work ) and how cheep they bought the property in comparison to the market in 2007.

Seems a lot for a one bed though...

Its not just a 1 bedroom, its a basement... there is no light and if you look at the pictures the 'garden space' is a dark 8ft * 10ft piece of damp concrete.

There main expense was having the place tanked as it was as damp as they come before they bought it, then there was the kitchen, flooring and decorating. They did the decorating (painting) and builders the rest.

Edited October 20, 2010 by MinceBalls

[MinceBalls]

But then the 175 doesn't sound too terrible for 2007, so maybe they bought well

I agree, I think they did OK to get it for that amount at the time - they bought off their landlord without it going onto the market. But it was a rotten damp pit and is a basement flat - you need the lights on in mid summer and a plant wouldn't last a week!

[wealthy]

Click on street view for a nice appraisal of the area. Some lovely decorative graffiti, shabby shops, and a whole load of traffic noise. Some definite selling points along with the fact that its a poky little basement flat. Yep, I'm sure it's worth 280K

[WageslaveX14]

Looks only a little bit smaller than the basement flat my friends bought in Shepherd's Bush in April for .......... £475k!!

They bought as a couple, but they have since split up and they are now trying to sell. They are also now having problems with damp.

It's a truly awful situation for them, and I bet they'll end up losing well over £100k. Was a fair chunk of BOMAD money involved, from both sets of parents.

[garybug]

Is it just me, or back on Planet Earth is that place really worth about 90k, max??

I worked for a while in the old "Samuel Peeps" pub in Hackney in the late 90's, and it was 'colourful' back then. No way in God's earth would I do it now...

[Executive Sadman]

This looks pretty similar for £100k less.

http://www.rightmove.co.uk/property-for-sale/property-26158744.html

If you dont mind living in a block instead of a converted terrace, RM says 1 bed flats in Bow start at around £120k

[tomandlu]

On the rightmove map, I misread a park name as "Meth Gardens"...

[Si1]

This looks pretty similar for £100k less.

http://www.rightmove...y-26158744.html

If you dont mind living in a block instead of a converted terrace, RM says 1 bed flats in Bow start at around £120k

surely a purpose built apartment building is preferable to a period conversion apartment, as in the latter you end up with odd shaped/sized rooms?

[MinceBalls]

surely a purpose built apartment building is preferable to a period conversion apartment, as in the latter you end up with odd shaped/sized rooms?

People can't get enough of that 'period' charm

When I moved to London - 15 years ago - i looked around Victoria Park and a house - 3 or 4 stories on a terraced street facing the park would have set you back 350K if you were willing to spend a bit of dosh tarting it up.

Now you can buy the basement and have a bit of spare change for the same price. And to think basements used to be for storing your bike in! And this is only 15 years we are taliing about - not 50! Myohmy!

[Si1]

People can't get enough of that 'period' charm

When I moved to London - 15 years ago - i looked around Victoria Park and a house - 3 or 4 stories on a terraced street facing the park would have set you back 350K if you were willing to spend a bit of dosh tarting it up.

Now you can buy the basement and have a bit of spare change for the same price. And to think basements used to be for storing your bike in! And this is only 15 years we are taliing about - not 50! Myohmy!

different ooop norf then. Funny when you get southerners on HPC, moving north,and can't believe the period properties you can get in parts of Northern cities, and the local northerners' response is somewhat subdued. I guess when real estate prices are more elevated as they are in the south, the extra maintenance costs of a victorian house over, say, a well made 1950s council house in the next street with lower maintenance, are a small proportion of the rather large capital outlay.

Reminds me further of a scene from 'lock stock and 2 smoking barrels' where the scouse hired thieves, robbing a mansion in the home counties, say 'these people must be really poor as all their stuff's so old'

Edited October 20, 2010 by Si1

[Mrs Bear]

http://www.rightmove.co.uk/property-for-sale/property-31479212.html

Friends of my partner (a couple) purchased a pokey little 1 bed (basement) flat near Victoria Park , East London for 175K during the heady days of 2007 (I said they were mental at the time). They spent 30K on it during a 4 month period and when they finished then decided it was too small for them to live in so they rented it out.

They have finally decided to sell it and were going to put it on the market for 250K. They spoke to a local EA who said 'try it out at 280K, someone might bite at that price'.

I didn't realise that house prices had gone up so much since the so called top of the market in 2007! We must all be on the gravy train again without anyone telling me.

So EA’s haven’t learnt a thing have they? Even if they make a bit of profit on top of their total expenditure – taking into account that house prices have dropped since then they should really only expect to put it on for 230K with a hope to get their money back – 200K*. How the hell did the EA come to the conclusion that 280K (30-40% above 2007 prices) was about right?

If someone buys that place for more than 220K I will elope.

IMO, we are nowhere near the panic, anger, capitulation phase – we have a long way to go before we reach that and anyone calling the end to 'back to normal' phase is premature.

*Edit: I mean HOPE to get their 200K back, in my opinion, 130K might be realistic but somewhere between 175-200 and they will be lucky. But 280? Christ on a bike!

If I were them, I'd pretty up that patio! Looks so dismal. There are plenty of plants that don't mind deep shade. A few tubs of green and a table and chairs would make all the diff. I'd stick a pot of winter pansies or cyclamen on the table, too.

But in the interests of HPC do feel free not to pass this on.

[ReadingRabbit]

Yes the EA's are still living in fantasy land, this was my conversation with a EA today (the house was on 299K I offered 250K - I am a first time buyer with 25% deposit):

Me: The maximum I can go is 250K, I have the deposit and will have no problems in getting the mortgage

EA: (Laughing) thats a gap of almost 50K and is insulting offer and the vendor will be offended

Me: Sure, its up to you whether you want to pass it or not but thats the max I am prepared to pay in todays market.

EA: My advice is that you stop looking to buy houses if you feel nervous about the market

Me: In the current market you can get a mortgage only if you have 25% deposit, this was not a norm before but it is now. Hence my offer is justified.

EA: Yeah yeah (banged the phone down)

[hedgefunded]

Yes the EA's are still living in fantasy land, this was my conversation with a EA today (the house was on 299K I offered 250K - I am a first time buyer with 25% deposit):

Me: The maximum I can go is 250K, I have the deposit and will have no problems in getting the mortgage

EA: (Laughing) thats a gap of almost 50K and is insulting offer and the vendor will be offended

Me: Sure, its up to you whether you want to pass it or not but thats the max I am prepared to pay in todays market.

EA: My advice is that you stop looking to buy houses if you feel nervous about the market

Me: In the current market you can get a mortgage only if you have 25% deposit, this was not a norm before but it is now. Hence my offer is justified.

EA: Yeah yeah (banged the phone down)

Name and shame then. I'll happily get on the phone and request details of a few 500k properties. (Which I want to buy for cash of course)

[Si1]

Yes the EA's are still living in fantasy land, this was my conversation with a EA today (the house was on 299K I offered 250K - I am a first time buyer with 25% deposit):

Me: The maximum I can go is 250K, I have the deposit and will have no problems in getting the mortgage

EA: (Laughing) thats a gap of almost 50K and is insulting offer and the vendor will be offended

Me: Sure, its up to you whether you want to pass it or not but thats the max I am prepared to pay in todays market.

EA: My advice is that you stop looking to buy houses if you feel nervous about the market

Me: In the current market you can get a mortgage only if you have 25% deposit, this was not a norm before but it is now. Hence my offer is justified.

EA: Yeah yeah (banged the phone down)

the EA was breaking the law by not passing on the offer AFAIK

[ofshore]

depends a lot on what they spent 30k on ( 30k of you own work is worth about 60-100k of a builders work ) and how cheep they bought the property in comparison to the market in 2007.

Seems a lot for a one bed though...

This is very true.

The [lack of] differential between basements and non-basements could probably be used as an indicator of how buoyant the market is.

Ditto the differential between Hackney and Islington.

Suspect in this case it will turn out to be how buyont one Hackney EA *thinks* the market is.

[hedgefunded]

the EA was breaking the law by not passing on the offer AFAIK

We've covered this many times. He may well have an agreement with the vendors not to pass on offers below a certain amount.

[MinceBalls]

Me: Sure, its up to you whether you want to pass it or not but thats the max I am prepared to pay in todays market.

I thought they were legally obliged to supply your offer to the vendor?

And FYI: you were only offering about 17% under the asking price, that is entirely reasonable.

People need to get it into their thick heads that because property is so inflated that small % equates to what they percieve to be lots of money but the % are still the same! EG: if someone offers 5% less on a 100K house the 5K might seem a reasonable reduction. But 15 years on the 100K house is 300K and 5% is 15K and the seller thinks its madness to 'discount' 15K even though the % is still the goddamn same!

[Si1]

We've covered this many times. He may well have an agreement with the vendors not to pass on offers below a certain amount.

have we? fair enough. at the same time, that is not what the EA said, but i take ypour point.

[ReadingRabbit]

have we? fair enough. at the same time, that is not what the EA said, but i take ypour point.

Well we are just at the beginning phase of panic/fear and EA's unfortunately whether rightly or wongly need to realise that they have to make money by doing more transactions not by inflating the prices. Personally I feel the offer was not bad but the need has to be there on sellers part (to sell) and we will see this need as we progress further. 6 months down the lines should be interesting....

[Peter Hun]

EA: My advice is that you stop looking to buy houses if you feel nervous about the market

Actually thats very good advice. The fact that you attempting to buy now indicates that you have far more confidence in prices than you claim. I have no intention of approaching an EA for the next four years, you should work on that sort of time scale.