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Paying Off Their Mortgage Is Wasted When House Value Collapsed Because Council Scheme To Sell Neighbouring Homes For £1

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http://www.dailymail.co.uk/news/article-3054505/Couple-s-anger-lifetime-paying-mortgage-wasted-house-value-collapsed-council-scheme-sell-neighbouring-homes-just-1-turned-street-ghetto.html

  • Linda and George Hunter became mortgage free around 15 years ago
  • But eight years ago, their street became part of a regeneration scheme
  • Liverpool city council bought houses and boarded them up for demolition
  • Estate agents say couple will now struggle to sell home for more than £1

Despite their neighbours moving out, the couple stayed put as they had elderly parents living close by who relied on them.

They thought that what the council was offering for their home at the time - around £85,000 - was too low and believed it was worth closer to £120,000.

..

An estate agent from Abode in nearby Allerton said: 'I would estimate a three-bedroomed house like one in Garrick Street would be worth around £60,000 at the moment but they would struggle to get even close to that.

'It would be very hard for them to sell their home when other properties in the road are being sold for £1.'

..

Mrs Hunter told the paper: 'We've spent our lives paying off a property that is now worth virtually nothing.

'Who's going to buy our house for thousands when they can get the house next door for £1?'

Considering the house is worth £1, £85k was a very generous market based offer. I wonder what other houses in the street where selling for?

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Is it a sensational story? Yes? Then you're reading the Daily Fail.

Firstly, even if you buy a house for a pound there are usually conditions like spending £30k+ renovating it then there can be other ties like having to give the council first refusal on a sale, etc.

Second, of course there is a value to paying off your mortgage - a vast reduction in property costs.

F***s given? None.

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An estate agent from Abode in nearby Allerton said: 'I would estimate a three-bedroomed house like one in Garrick Street would be worth around £60,000 at the moment but they would struggle to get even close to that.

It's not worth £60,000 then is it?

You know when an estate agent is lying..... their lips are moving.

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They thought that what the council was offering for their home at the time - around £85,000 - was too low and believed it was worth closer to £120,000.

....based on what exactly?

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http://www.dailymail.co.uk/news/article-3054505/Couple-s-anger-lifetime-paying-mortgage-wasted-house-value-collapsed-council-scheme-sell-neighbouring-homes-just-1-turned-street-ghetto.html

Considering the house is worth £1, £85k was a very generous market based offer. I wonder what other houses in the street where selling for?

According to a comment on the article in the Liverpool Echo, the most a house on that street was ever sold for was £70k.

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I'm guessing this is the left over from one of Fatty Precoot's 'genius' path finder program?

A couple of those were rolled out in Middlesbrough - and left half finished.

No point knocking down the houses. Most of the houses, although a bit small, could be modernised - shower in, new heating, new windows.

Houses don't rob you and sh1t on your front room carpet.

Shoot the people living in those areas.

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Oh come on, they weren't giving it away!

Unfortunately the council were busy giving away their neighbours! :P

I actually think £50-60k for a small house, seems about the right level. Although the street and surround area might push that price down a bit. When will London hit the same price level! :P

Edited by renting til I die

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I'd jump at one of these £1 schemes, but you have to live in Liverpool or wherever already.

The article doesn't say how much they paid for the house in the first place. I'm guessing it was a lot less than £85k, if they paid off the mortgage 15 years ago.

Live in your house and be happy you aren't renting. You'll soon have a lot of new, upmarket neighbours, rather than an empty boarded-up street. Your house will be worth a lot more than £1, then.

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If the £1 is such a bargain, why don't they buy the whole street?

you cant buy if you already own.

You cant buy more than one.

Im sure there are other restrictions.

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I'm guessing this is the left over from one of Fatty Precoot's 'genius' path finder program?

A couple of those were rolled out in Middlesbrough - and left half finished.

No point knocking down the houses. Most of the houses, although a bit small, could be modernised - shower in, new heating, new windows.

Houses don't rob you and sh1t on your front room carpet.

Shoot the people living in those areas.

I think it was - a really bad idea. If there are empty houses in the North there are lots of people in London who should move there.

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http://www.dailymail.co.uk/news/article-3054505/Couple-s-anger-lifetime-paying-mortgage-wasted-house-value-collapsed-council-scheme-sell-neighbouring-homes-just-1-turned-street-ghetto.html

Considering the house is worth £1, £85k was a very generous market based offer. I wonder what other houses in the street where selling for?

If houses are selling for £1 it's quite obvious house prices have very little to do with credit.

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If houses worth zero sell for £1, or houses worth whatever don't sell at all unless government subsidises via right-to-buy for those who can't otherwise afford housing, it says nothing and everything about credit and prices respectively.

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Another "The world owes me"... "Think it's worth £120,000".... "Low IQ"

The world changes. They turned down a very generous offer ages ago vs scheme prices today. The world changes.

If it were a younger couple, the excuses would be flowing...

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If houses worth zero sell for £1, or houses worth whatever don't sell at all unless government subsidises via right-to-buy for those who can't otherwise afford housing, it says nothing and everything about credit and prices respectively.

Most people can afford housing. Thats not a problem as well you know.

The problem is credit is too tight due to low LTVs so FTBs cant save the 20% deposit.

If house prices fell 20% they still couldnt afford the 20% deposit.

Point is, if houses and the land they sit on can be bought for £1 this silly meme about "too much credit" is clearly jibberish.

If supply sufficiently exceeds demand the price of a house and the land it sits on today will fall to £1. As evidenced

Edited by R K

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Point is, if houses and the land they sit on can be bought for £1 this silly meme about "too much credit" is clearly jibberish.

... From the council. ...With strings attached, in particular who can buy it.

It's not a market rate, it's a fixed rate. It's a state handout effectively.

Edited by EUBanana

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... From the council. ...With strings attached, in particular who can buy it.

It's not a market rate, it's a fixed rate. It's a state handout effectively.

Of course! Its an extreme example. But for that locality it is nevertheless the case.

Move the exact same plot of land/pile of bricks to Kensington on the other hand with the exact same cost of capital/credit price and see what happens.

Edited by R K

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As a newcomer to this stuff I enjoy reading your posts, RK. I'm struggling with this one. It throws up contradictions in my mind. Can you elaborate?

My initial reaction is that if "most people can afford housing", perhaps the definition of what people deem affordable needs addressing? If the problem is not enough credit, then more credit required for purchases = property is less affordable doesn't it?

If I have to save first and buy later, that means I can afford it later, not now. In fact, I am taking steps to put myself in a position to afford it rather than being sold a product to convince me that I should 'afford it' now, the world owes me the ability to be able to 'afford it' now and that 'affording it' = borrow more. If I have to drag money out of the future + interest, that means I can't afford it. Currently, everyone needs to save £5,000 a year from birth to be able to get a vast deposit for small borrowing to be able to afford (in the more traditional and manageable sense) to buy a property. I'm trying to relate the ability to pay for things in terms of wage vs cost of buying accomodation, or even paying for anything at all.

Perhaps the new version of affordability only relates to how much banks say you can borrow, rather than buying anything with a portion of money that actually exists?

I realise the above may be a viewpoint that is outside of, and therefore un-coloured by, knowledge of complex economics (which, having spent a couple of months perusing the boards seem to me to be layer upon layer of confusion to benefit the few and pigeon-hole the many) but I'm struggling with stripping back my logic as laid out above to factor in economics that appear to hurt rather than help.

Be gentle.

: )

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