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TheCountOfNowhere

My Friend Bought A House 18 Months Ago....

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Speaking to a friend of mine who bought a house 18 months ago ( at the low point of the housing market ), convinced it was time to buy and that prices would start going up 10% yoy again.

He was a bit annoyed yesterday when he had the E.A.( or Unqualified Rip off 2nd hand house salesman, as I prefer to call them )

in to find out it they valued less than he paid for it !!!!

Just slightly less, but less none the same.

He's somewhat perplexed and is convinced the agent is wrong. What with cost of buying and now having to move for work he's looking at a loss or maybe 10K in a 18 months. He's now convinced prices will not just keep going up and will be looking to rent when(if) he sells. He things they will remain constant for a few years. He was convinced when the prices dropped 20% that was it and he'd got a bargain ( though I thought he was over-paying for it) and was gonna make good money...like his parents had.

It's a hard lesson for him as he is loosing his job and has a young family.

Can't be too smug about it but how many more are in this boat ? How many have bought 12+ months ago thinking they were gonna make an (pretty much) instant 20% ?

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Speaking to a friend of mine who bought a house 18 months ago ( at the low point of the housing market ), convinced it was time to buy and that prices would start going up 10% yoy again.

He was a bit annoyed yesterday when he had the E.A.( or Unqualified Rip off 2nd hand house salesman, as I prefer to call them )

in to find out it they valued less than he paid for it !!!!

Just slightly less, but less none the same.

He's somewhat perplexed and is convinced the agent is wrong. What with cost of buying and now having to move for work he's looking at a loss or maybe 10K in a 18 months. He's now convinced prices will not just keep going up and will be looking to rent when(if) he sells. He things they will remain constant for a few years. He was convinced when the prices dropped 20% that was it and he'd got a bargain ( though I thought he was over-paying for it) and was gonna make good money...like his parents had.

It's a hard lesson for him as he is loosing his job and has a young family.

Can't be too smug about it but how many more are in this boat ? How many have bought 12+ months ago thinking they were gonna make an (pretty much) instant 20% ?

I think he got off lightly. Some people pay more than that in rent in a year. dry.gif

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That's brilliant! :D

Hope you said "told you so" why can't you be smug? Just rub his face in it. I would.

Also remind him that he is unlikely to receive any more than 10% below asking price for it. So looks like a very expensive few months for him.

Ha.

Edit: also add 18 months mortgage interest payments and it's looking like quite a hefty loss.

Edited by Pent Up

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I think he got off lightly. Some people pay more than that in rent in a year. dry.gif

Depends, if he did paid the stamp duty , and did some stuff in the house, he might has lost more than 10k... And now if he has to sell, paying fees will cost him money anyway

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Plus the interest on their savings pays their rent.

Mine does anyway ...

You must have some savings if you can pay your rent out of it on today's poxy rates.

even a room in a student house is now about 70 quid a week, about 300 a month, or £3.6K a year. Even if you were getting an unheard of tax-free 4%, you'd need 90K in the bank/savings vehicle.

Edited by noodle doodle

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I think he got off lightly. Some people pay more than that in rent in a year. dry.gif

.....er.....he was paying rent on to of the £10k bath that he faces........only his rent was paid to the bank.

It is doubtful that he will have knocked more than a few pounds off the mortgage in 18 months so......he is far worse off than had he just rented.

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They are not trapped in their home though?

Plus the interest on their savings pays their rent.

Depends, if he did paid the stamp duty , and did some stuff in the house, he might has lost more than 10k... And now if he has to sell, paying fees will cost him money anyway

.....er.....he was paying rent on to of the £10k bath that he faces........only his rent was paid to the bank.

It is doubtful that he will have knocked more than a few pounds off the mortgage in 18 months so......he is far worse off than had he just rented.

.....but but...but renting is dead money isn't it? </sarcasm> ;)

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More and more stories like this. Public perception is changing - Housing will eventually be seen as a cost of living, rather than a way to get rich.

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More and more stories like this. Public perception is changing - Housing will eventually be seen as a cost of living, rather than a way to get rich.

That's exactly what I thought.

He has equity in the house so in theory wont be trapped that way. In practise...will he take a loss...will he trap himself by not wanting to....but he will have to move for work so is effectively a forced seller.

He's a nice chap so I wish him well but I think a lot of people who bought over the last 18 months will be slowly beginning to realise....a house is a home...not an investment !!!

While i;m at it....I know a young lad who bought a house on this street 5 years ago:

http://www.rightmove.co.uk/property-for-sale/property-25447015.html

"19 October 2010

* Status changed: from 'Available' to 'Under offer' [Found by n/a]

13 October 2010

* Price changed: from '£104,950' to '£99,950' [Found by n/a]

* Status changed: from 'Under offer' to 'Available' [Found by n/a]

19 September 2010

* Status changed: from 'Available' to 'Under offer' [Found by n/a]

25 August 2010

* Price changed: from '£114,950' to '£104,950' [Found by n/a]

29 May 2010

* Price changed: from '£119,950' to '£114,950' [Found by n/a]

02 April 2010

* Initial entry found. [Found by n/a] "

Take 5-10% off that and someone might have bought it for 95K...or less. The lad in question paid £105K....That's in 2005/6 !!!! I thought then it was an awful lot of money...I still do.

If he'd reneted he'd have been no worse off.

Edited by TheCountOfNowhere

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I agree , there is a lot of made up stories like this one that appear on this site everyday.

Hey Estate agent type chappy.

I've been on this site for several years and havent made up any stories, I dont have to. There is a housing market crash in progress, we are in the middle of it and standing on the sides watching it is quite fascinating and give's us a lot of things to discuss, share.

The point of my post was to get peoples feelings on anyone who has bought in the last 18 months, not to prove facts/figures/dates/times.

The post clearly states this is a bit anecdotal....most things on here are and at least I've pointed this out.

Now, stop being an ****.....please.

Edited by TheCountOfNowhere

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Speaking to a friend of mine who bought a house 18 months ago ( at the low point of the housing market ), convinced it was time to buy and that prices would start going up 10% yoy again.

Your mate must be a right half-wit if he thought prices were going to start going up 10% a year at a time like this. Are you SURE that's what he thought - or is it what you think he thought? Maybe, like the vast majority of people, he just wanted somewhere to live and didn't fancy paying a landlord's mortgage for him - the NUTTER!

Can't be too smug about it but how many more are in this boat ? How many have bought 12+ months ago thinking they were gonna make an (pretty much) instant 20% ?

3? 5? 9? Who knows? Not many I'd say. Not many people thick enough to think that houses were going to go up by an instant 20%. Let's face it, when they did go up again after the banking crisis was 'fixed', all the property pundits and financial gurus said it was 'unexpected'.

Your friend has been unlucky. He has to move because of a change of circumstances just 18 months after buying. Most people would lose money in this situation, most of the time - due to the costs of buying, selling and the fact that little or no capital is repaid in the early years of a mortgage.

If he doesn't want to take the loss, maybe he'll do what lots of people seem to be doing - rent the fecker out and rent where he needs to work until the market picks up and he can get out ahead of the game. He may well have a long wait though.

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Speaking to a friend of mine who bought a house 18 months ago ( at the low point of the housing market ), convinced it was time to buy and that prices would start going up 10% yoy again.

He was a bit annoyed yesterday when he had the E.A.( or Unqualified Rip off 2nd hand house salesman, as I prefer to call them )

in to find out it they valued less than he paid for it !!!!

Just slightly less, but less none the same.

He's somewhat perplexed and is convinced the agent is wrong. What with cost of buying and now having to move for work he's looking at a loss or maybe 10K in a 18 months. He's now convinced prices will not just keep going up and will be looking to rent when(if) he sells. He things they will remain constant for a few years. He was convinced when the prices dropped 20% that was it and he'd got a bargain ( though I thought he was over-paying for it) and was gonna make good money...like his parents had.

It's a hard lesson for him as he is loosing his job and has a young family.

Can't be too smug about it but how many more are in this boat ? How many have bought 12+ months ago thinking they were gonna make an (pretty much) instant 20% ?

Mixed feelings on this. EA's push people really hard to buy. Yeah, yeah. I know it's their job but they really put people under pressure. Some people can't take it. Maybe he was one of those?

On the other hand, do people really not do the numbers? I think a lot of people really can't understand that their mortgage will have to be repaid even if their house does not cover it. If there is any chance you need to move, then don't buy but rent - why are people so rent adverse? can't they use a calculator and work out the difference each month?

Sounds like your friend thinks though he is still going to win out. Got the blinkers on.

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Your mate must be a right half-wit if he thought prices were going to start going up 10% a year at a time like this. Are you SURE that's what he thought - or is it what you think he thought? Maybe, like the vast majority of people, he just wanted somewhere to live and didn't fancy paying a landlord's mortgage for him - the NUTTER!

3? 5? 9? Who knows? Not many I'd say. Not many people thick enough to think that houses were going to go up by an instant 20%. Let's face it, when they did go up again after the banking crisis was 'fixed', all the property pundits and financial gurus said it was 'unexpected'.

Your friend has been unlucky. He has to move because of a change of circumstances just 18 months after buying. Most people would lose money in this situation, most of the time - due to the costs of buying, selling and the fact that little or no capital is repaid in the early years of a mortgage.

If he doesn't want to take the loss, maybe he'll do what lots of people seem to be doing - rent the fecker out and rent where he needs to work until the market picks up and he can get out ahead of the game. He may well have a long wait though.

Maybe you know him and you can ask him ?

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I think the bounce they all witnessed in prices after the falls of 2007 will just confuse them into thinking the same circumstances apply this time around so they will sit there waiting again for the market to catch up once more with their inflated asking prices.

We had people round for dinner the other night and they were asking about property values in my area (IG9) so with me knowing already that this guy rents himself I went off on a big speech about the banks not wanting to lend etc which will cut off the credit supply etc and will force prices to realign with salaries for the first time in 12 plus years etc and could see this guy twitching in his chair looking uneasy. After they went home I asked Ms W - What was up with David when I was talking about house prices, he rents doesnt he? To which she replied, well yes he rents but owns a flat which is lets out near E4..... :D

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That's exactly what I thought.

He has equity in the house so in theory wont be trapped that way. In practise...will he take a loss...will he trap himself by not wanting to....but he will have to move for work so is effectively a forced seller.

He's a nice chap so I wish him well but I think a lot of people who bought over the last 18 months will be slowly beginning to realise....a house is a home...not an investment !!!

While i;m at it....I know a young lad who bought a house on this street 5 years ago:

http://www.rightmove...y-25447015.html

"19 October 2010

* Status changed: from 'Available' to 'Under offer' [Found by n/a]

13 October 2010

* Price changed: from '£104,950' to '£99,950' [Found by n/a]

* Status changed: from 'Under offer' to 'Available' [Found by n/a]

19 September 2010

* Status changed: from 'Available' to 'Under offer' [Found by n/a]

25 August 2010

* Price changed: from '£114,950' to '£104,950' [Found by n/a]

29 May 2010

* Price changed: from '£119,950' to '£114,950' [Found by n/a]

02 April 2010

* Initial entry found. [Found by n/a] "

Take 5-10% off that and someone might have bought it for 95K...or less. The lad in question paid £105K....That's in 2005/6 !!!! I thought then it was an awful lot of money...I still do.

If he'd reneted he'd have been no worse off.

Yes, as I keep saying to anyone who will listen - house prices in many parts of the country have been effectively static for (in my area) 7 to 10 years now.

The problem with this is ... that so much money, and so many people, are heavily invested in the market. Not like the boom/crash in the late 80s/early 90s which took a few years to inflate (and never reached many parts of the country) and two years to deflate.

A house price crash now will take the banking system with it.

The last house price crash could be coped with because, by comparison, there was little money and few people fully invested. Negative equity stalked the land, but it only affected a relatively small number of people.

Edited by Let's get it right

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More stories eh? Hopw about one demonstrating the nous of the canny vendor and expert advice from the agent at work in perfect harmony!

Mrs CM and I looked at a house more than 2 years ago purely on the basis of the back garden. Lovely garden, in fact stunning. And it overlooked a spinney. Perfect for walking the dog.

But the house had issues. They had built an extension on the back 'to look at the amazing garden' but had only put a flat roof on which retained water and caused a damp problem. And the french windows were stuck/warped so we couldnt go out into the garden.

The house was priced just a little less than other peak price houses on the road (possibly to reflect the work that needed to be done) In a climbing market I am sure someone would have paid full asking.

We had the obligatory conversation with the agent afterwards during which I dismissed any possible interest at any price and pointed out that the price was completely unrealistic due to the falling market and the faults. Of course questioning the price fell on deaf ears.

A couple of months later it was 'to let'. Nothing unusual you might think. Lots of people rented out whilst waiting for the market to recover.

Well I am pleased to report it finally showed up on the LR fgures a couple of days ago. Sold for 76% of the original asking price!

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Hopw about one demonstrating the nous of the canny vendor and expert advice from the agent at work in perfect harmony!

You mean about the EA persuading an OAP to sell much lower than market value to EA's friend while EA gets several thousand under the table.

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Yes, as I keep saying to anyone who will listen - house prices in many parts of the country have been effectively static for (in my area) 7 to 10 years now.

The problem with this is ... that so much money, and so many people, are heavily invested in the market. Not like the boom/crash in the late 80s/early 90s which took a few years to inflate (and never reached many parts of the country) and two years to deflate.

A house price crash now will take the banking system with it.

The last house price crash could be coped with because, by comparison, there was little money and few people fully invested. Negative equity stalked the land, but it only affected a relatively small number of people.

In my area the boom was really ~1998-2005, after which prices have been fairly stable, with some recent declines. Wonder what the sum total of transactions in over the past 6 years..

Oh, and bear in mind IO mortgages. If you bought in 2005 with an IO mortgage and haven't bothered making capital payments, you may as well have bought yesterday as far as NE is concerned.

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In my area the boom was really ~1998-2005, after which prices have been fairly stable, with some recent declines. Wonder what the sum total of transactions in over the past 6 years..

Oh, and bear in mind IO mortgages. If you bought in 2005 with an IO mortgage and haven't bothered making capital payments, you may as well have bought yesterday as far as NE is concerned.

In my area the boom was from around 1820 to 2007, im going to buy a 42 bed mansion for half a pheasant by the time this puppys over, with a bit of luck a 12 berth Yacht will get thrown in free

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  • 239 Brexit, House prices and Summer 2020

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      • down 5% +
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