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Sorry chaps - wasn't frightened away....have just got out of hospital and still recovering from a near-drowning incident caused by poor window-seals!

I did a fair amount of research before signing my life away....and was just using Telephone House as a comparison for a new-build. With regard to 10% return being a poor investment for a rental.....this is a 10% return just on rent v costs and doesn't take into account long-term inflation. Take your pick of any city-centre appt in Southampton and it's likely to be lower, or indeed negative! I'm not saying it's the best investment in the world....but the main purpose of this one is to be my home, and allow me to rent it and accrue long-term capital gain without costing me anything if I go and work overseas in the near future.

To clarify on the other comments:

  • Was taking mngt fees and £100 a month to cover ad fees etc into account (although I have no intention of letting this one at the moment, it's nice to know it'd pay for itself)

  • The management fees for the block were projected at almost £2k per unit for the year due to the insurance issues, but £700 has just been credited back after the revised costs after this was sorted. Approx costs for next year should be ~£1100K...which is fine for me (Imperial Appts over the road is >£2.1k per year....but obviously a lot prettier!)

  • On the problems, after having several surveys I'm well aware of exactly what the problems were/are and what's being done to resolve....I can't really say any more than that! If there's no condensation between the panes, the brick-work is sound, there's a dribble of water coming through a gap between a window and a stained carpet below it....I think we'd all agree it probably is a window seal! I mentioned that wasn't the only issue...and had the balcony metalwork removed and a new membrane fitted below it last week under the NHBC. There is a remaining guarantee, the builder has admitted liability and employed a team full-time to resolve any problems....which mainly do revolve around poor window installation due to a cow-boy contractor (as the roof/plumbing issues were all fixed a while back). Provided this is taken into account during the purchase decision and seriously reflected in the price, I'm really not too worried. Had I bought new, suffered a deflation on the value of the property and had to wait several years for it to be resolved then I'd be upset! The major drop in prices at Charter House is/was due to build faults and insurance issues....the second of these is solved and the first is 80% of the way there, with acceptance of liability and ongoing work to resolve the remaining problems.

In many respects I agree with the 'doom and gloom' view and the 'standard 2 bed flat' situation in Southampton City Centre has spiralled out of control, hence the correction in prices over the last two years. One of my flats just outside the city centre was ~£190k just over two years ago and an equivalent went recently for £165. Supply and demand rules, and on a new average sized 2 bed flat the current pricing is going to leave a lot of people disappointed when they go to sell.

Taking the correction over the last 2-3 years into account, and as long as you don't go new-build at a vastly inflated price, there's still reasonable investments to be made....but mainly in either 3 bed in the city, or something a lot larger just outside. Anyone trying to make a fortune overnight by buying flats is going to have a very difficult job....but as long as you could survive 7% interest rates, buy something a bit different to the norm and look at it as a long term investment then I don't think you're not necessarily going to go bankrupt......

On bog-standard 2 bed 'luxury' city-centre appartments....I'm definitely with everyone on the bear front....and it'll be very interesting to look back on this thread in a year or two's time and see how things have panned out!

For me, if you're looking at the BTL side of your purchase, there are three major problems. Firstly, the initial yield is the money you receive in the first year divided by the price you paid. I'd be surprised if this is more than 3-point-something per cent. The net yield on a building society account is more than this. To make money, you are relying on reasonable capital gains (especially allowing for CGT). As property values have soared over the past 10 years, it's become taken for granted by many (outside HPC anyway) that they will go on rising forever. But there are signs that prices are falling, starting with flats, and prices have become totally out of line with earnings. So secondly, you are taking a risk that prices fall or don't go up very much, perhaps also that interest rates rise depending on your mortgage type. Overall, I'd be surprised if you didn't do better in a building society which would be almost risk free, at least in nominal cash terms.

Another problem specific to flats is what happens to inner cities. 'City living' attempts to gentrify and move towards European-standard city centres appear to be floundering. Problem people seem to end up in flats and a handful can create a post-apocalyptic ambience to the most modern of developments within a few years.

Sounds as though you're happy with it though, it's a done deed & you're not looking to earn a fortune.

I do believe you about the window seals! It's just that I think are other problems which can't be so easily solved.

Edited by somethingfishy
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A note about the Tricorn - when they were demolishing it. They had to stop work because they had come across a TON of pigeon poo [knee deep] that had accumulated in the roof which was rotting many years. Imagine the stink, rats, maggots, dead cats in there - and the heat generated. They had to call in specialists to remove the biohazard.

Edited by notanewmember
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For me, if you're looking at the BTL side of your purchase, there are three major problems. Firstly, the initial yield is the money you receive in the first year divided by the price you paid. I'd be surprised if this is more than 3-point-something per cent. The net yield on a building society account is more than this. To make money, you are relying on reasonable capital gains (especially allowing for CGT). As property values have soared over the past 10 years, it's become taken for granted by many (outside HPC anyway) that they will go on rising forever. But there are signs that prices are falling, starting with flats, and prices have become totally out of line with earnings. So secondly, you are taking a risk that prices fall or don't go up very much, perhaps also that interest rates rise depending on your mortgage type. Overall, I'd be surprised if you didn't do better in a building society which would be almost risk free, at least in nominal cash terms.

Another problem specific to flats is what happens to inner cities. 'City living' attempts to gentrify and move towards European-standard city centres appear to be floundering. Problem people seem to end up in flats and a handful can create a post-apocalyptic ambience to the most modern of developments within a few years.

Sounds as though you're happy with it though, it's a done deed & you're not looking to earn a fortune.

I do believe you about the window seals! It's just that I think are other problems which can't be so easily solved.

Thanks - and I'm complete agreement with you. The initial yield on the purchase is actually in the region of 6%pa of purchase price (inc management fees) so I'm guessing this is a fairly decent return for a city centre appt. It would cover the mortgage and then some, so I'm not too worried. On the capital gains front, I'm certainly not expecting to make a lot between the equity I've bought into and the sell price in the next couple of years....but I'd always treat property the same as stock and not buy into anything that I couldn't afford to keep hold of for a while.

There's definitely more than a sign that prices are falling....I've certainly lost money in the last 2 years (which now appears to have stabilised, and dare I say started increasing again based on the last sale), although I'm still fairly convinced that if you look at everything in a 7-10 year timeframe and you don't put your **** too much on the line there's not a lot to worry about.

The 'Post-Apocalyptic' ambience is also something I can very much relate to! Having lived in a Linden new-build (after being assured a fence would be erected between the development and the Housing Association properties) and seen things go from bad to worse in a short space of time it's something I'm very wary of. After putting the ASBO line on speed-dial things improved slightly, but I'm amazed at the amount of new developments that lack security and CCTV. I believe that the social housing within the development was placed seperate of Charter House (at the side of the cinema), and the parking is secure so I'm hoping for the best! Have learnt the hard way that the Ground Floor is bad news...after losing several Sky dishes and woken up with various adornments on the balcony......:-(

On the other issues side I can only verify the info I have on my unit, but as the buildings insurance is now fixed and Persimmon/NHBC appear to be doing a decent job, I'm guessing the others are going the same way.

...and thanks for your advice!

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Thanks - and I'm complete agreement with you. The initial yield on the purchase is actually in the region of 6%pa of purchase price (inc management fees) so I'm guessing this is a fairly decent return for a city centre appt. It would cover the mortgage and then some, so I'm not too worried. On the capital gains front, I'm certainly not expecting to make a lot between the equity I've bought into and the sell price in the next couple of years....but I'd always treat property the same as stock and not buy into anything that I couldn't afford to keep hold of for a while.

There's definitely more than a sign that prices are falling....I've certainly lost money in the last 2 years (which now appears to have stabilised, and dare I say started increasing again based on the last sale), although I'm still fairly convinced that if you look at everything in a 7-10 year timeframe and you don't put your **** too much on the line there's not a lot to worry about.

The 'Post-Apocalyptic' ambience is also something I can very much relate to! Having lived in a Linden new-build (after being assured a fence would be erected between the development and the Housing Association properties) and seen things go from bad to worse in a short space of time it's something I'm very wary of. After putting the ASBO line on speed-dial things improved slightly, but I'm amazed at the amount of new developments that lack security and CCTV. I believe that the social housing within the development was placed seperate of Charter House (at the side of the cinema), and the parking is secure so I'm hoping for the best! Have learnt the hard way that the Ground Floor is bad news...after losing several Sky dishes and woken up with various adornments on the balcony......:-(

On the other issues side I can only verify the info I have on my unit, but as the buildings insurance is now fixed and Persimmon/NHBC appear to be doing a decent job, I'm guessing the others are going the same way.

...and thanks for your advice!

Prices in Southampton appear to have fallen further than I'd realised; to get an initial yield of 6% in my local Basingstoke bete jaune Crown Heights would mean paying £90,000 for a flat; the current minimum asking price is £165,000! £90k is reasonable FTB territory, perhaps Southampton prices can filter north a bit....

(I don't think I was giving advice by the way, just suggesting there might be better alternatives....)

Edited by somethingfishy
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Recently viewed a property in a village called Holbury just outside of Southampton. Well the 3 bed house was up for £160950 it had no gas/central heating and had storage heaters. Also there was a few other jobs that needing doing. so I walked in yesterday and offered £146000 the estate agent thought I was taking the biscuit and said she would refuse straight away and that she had already turned down a offer of £155000. So at that point I said fair enough and goodbye and walked out.

Both the estate agent and woman in question was asking way to much for this property just goes to show how greedy they can be.

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I was down the lower end of town the other day by the new BT development and I was really suprised at the amount of water damage and moss on some of the recent developments. Also just arround the corner towards the old McCluskies there is a development which is wood clad. The cladding has already completely faded - looks terrible!

Anybody know what gives with McCluskies? Redevelopment?

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Property in Gosport coming back on the market....

These new-build flats were "all sold" in early spring. Now appear to be back on the market before completion. I'm guessing FTB sale fell through or BTL got cold feet.

http://www.rightmove.co.uk/viewdetails-918...=2&tr_t=buy

Note estate agents too tired to take new photos (office less than five minutes' walk from location). It's August and all trees are fully in leaf now.

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Property in Gosport coming back on the market....

These new-build flats were "all sold" in early spring. Now appear to be back on the market before completion. I'm guessing FTB sale fell through or BTL got cold feet.

http://www.rightmove.co.uk/viewdetails-918...=2&tr_t=buy

Note estate agents too tired to take new photos (office less than five minutes' walk from location). It's August and all trees are fully in leaf now.

Jeez, they look like a sodding prison!

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Jeez, they look like a sodding prison!

The photo definitely doesn't do it justice, and they really should have got some new ones instead of relying on last year's library shots. Attractive location and not a bad finish on these properties.

As with much property in the area nowadays grossly overpriced and beyond the pocket of young people in the area. Two bed terraced now sell for double what they were five years ago and 7 times local wages.

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All the postings in this thread seem to be about flats - what's the situation regarding houses in Southampton? They seem to be in much tighter supply!

I am no expert, and have no figures to post , but I have been watching the Southampton market closely over the last year , especially in the East of the city . There are some houses that have been on the market for months . Some asking prices seem to have dropped by around 10% in that time . I would guess that prices are slowing bigtime here in Southampton . Just for info ,there are 3 bedroom houses in the Sholing district (which is not a bad area, quite nice actually ) that are being offered for around £150,000 . Many of these are "no forward chain" , and have been on the market for nearly a year .

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I am no expert, and have no figures to post , but I have been watching the Southampton market closely over the last year , especially in the East of the city . There are some houses that have been on the market for months . Some asking prices seem to have dropped by around 10% in that time . I would guess that prices are slowing bigtime here in Southampton . Just for info ,there are 3 bedroom houses in the Sholing district (which is not a bad area, quite nice actually ) that are being offered for around £150,000 . Many of these are "no forward chain" , and have been on the market for nearly a year .

http://www.rightmove.co.uk/action/publicsi...bmit_dosearch=1

Just as a "PS" These flats have been completd since the Autumn . "40% RESERVED" scream the headlines . In my book that equals the 60% are UNRESERVED!!!!

Would you buy one of these , whe there are 3 bed houses within a mile radius being offered for less than £140,000 ???

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An old friend has turned up at auction....

http://www.propwld.co.uk/auction/pdfs/agen...on/Lot%2020.pdf

Went for 500K in 2003

http://www.houseprices.co.uk/e.php?q=FLAT+...+85+CANUTE+ROAD

No guide price - because the auctioneers know this site loves the development?

btp

Edited by backtoparents
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