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Crash Cost Us £20,000 And Our Home

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Only talking about newbuilds..but it's a start!

THE housing market may be looking better generally, but the picture is not rosy everywhere - as Adele and Travis Cowgill discovered to their cost.

Adele and Travis Cowgill DEVASTATED: Adele and Travis Cowgill lost out after the value of their new flat slumped

The slump in value of newly built flats in city centres has meant that they have lost a deposit of more than £20,000. And they have no home to show for it.

DEVELOPERS rely on incentives such as cashbacks or discounts to shift the near-identical flats they have built in their thousands in city centres. They say that prices of such properties are holding well and demand is big. Others are not convinced.

Liam Bailey, head of research at estate agent Knight Frank, says: 'There is no major city centre where prices for this type of property are not flat or falling.' Matthew Wyles, Portman Building Society director, says: 'Developers are giving investment buyers discounts to keep prices high. The victims are lenders, who lend more money than they would wish, and owner-occupiers who end up overpaying.'

http://www.thisismoney.co.uk/mortgages/art...62&in_page_id=8

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This should read;

Stupidity Cost Us £20,000 And Our Home

How many times have we read arguments stating, do not buy these places? Everywhere I go I see new build flats popping up, is it any wonder why they don't hold their value?

A couple quickies;

1. I've seen a flat not too far from where I live, 2 bed priced at about £145k. Does they vendor even realise that Persimmon are building a whole heap of new flats just down the road, £20k cheaper and with all the perks like stamp duty paid etc?

2. A friend has bought a BTL flat in Middlesbrough (yes, you heard me). Got the deposit by mewing (laready swamped in debt), struggling to find decent tenants (wot no young professional in the 'Boro?) and his rent just about covers the mortgage!!

:blink:

Maybe he'll have the last laugh, but this guy can't afford to invest, IMO.

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That's one hell of a fall from original asking price - nearly 20%.

Unfortunately I know at least 3 FTB at work who are just shrugging their shoulders and paying these prices (usually with parents help I suspect as most are on considerably lower salaries than me).

I'm afraid I leave them to it - after explaining that me and mrs greencat decided to continue saving and wait for a fall - they are usually too busy looking at the Foxtons website to hear that bit ;) .

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If people will excuse me splitting hairs, but I'm not sure the family's problems are just due to stupidity. Daniel Barenboim (talking about music) in the first of the Reith lectures notes makes the point that if people make a decision to do something, or not do something, due to ignorance then that is not free will.

The people who bought the flat are probably victims of ignorance as well as stupidity. They didn't know enough to really make the best decision about investing in property. There have been some articles talking about newbuilds being a poor investment decision, but when did the family buy the flat, and was that before there were lots of articles about poor returns from newbuilds. But even now I read articles about how newbuilds are good investments and there are lots of professional tenants available who will pay top rents.

Personally I think that if I tried to invest in foreign currencies, or gold, that I would be no better at it than this family as I know nothing about how these markets work. Personally I don't believe that I'm stupid, but admit that I'm ignorant about those investments. For me, my ignorance will preclude me investing in gold and currency, so I won't lose out through that method, but neither will I gain. So my free will to make decisions is limited by my ignorance, and there is no guaranteed "safe" option as if I choose not to invest in gold, and money devalues, then I have lost.

It's impossible to live your life without trusting other people and experts on some things. For example I have neither the time nor the ability to verify that every medicine I take is both safe and effective. So I have to trust what I am told by doctors and experts. There are fairly good opportunities to get well backed up information about medicine. Nowhere near guaranteed, but reasonably good. There's still the opportunity for stupidity as there are no shortage of people who will go for ineffective unproven "alternative medicines" or "new age healing".

But when it comes to information about investments, I can't see that we can get information of the quality of the information we can get about medicines to help us make proper decisions. This results in ignorance, ambiguity, false beliefs, and other problems. And the results are people losing their shirts.

But it's not just stupidity. And I believe that it's not just the family's own fault.

Billy Shears

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i have posted a few times recently about 2 bed new build flats in wetherby (they are flats, not apartments) - well, following a brief trawl of EAs yesterday I am pleased to report there are 15 I can find that currently give a yield of less than 3% and a whole new block about to be put up for sale

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i have posted a few times recently about 2 bed new build flats in wetherby (they are flats, not apartments) - well, following a brief trawl of EAs yesterday I am pleased to report there are 15 I can find that currently give a yield of less than 3% and a whole new block about to be put up for sale

Ahhh, you're just down the road from me. You'll have to keep me posted.

greencat,

IMO, it's not the buying thing, it's what they chose to buy. These flats are springing up everywhere and struggling to sell, I suspect no one will really want to live in them in a few years time, especially when the laminate floor/open plan mania subsides.

billy,

Point taken, ignorant would have been a better word. Although part of me agrees with Dr Bubb, I mean when you consider the amount of money that is changing hands...

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Ahhh, you're just down the road from me. You'll have to keep me posted.

quick link to Renton and Parr who aren't too bad compared to some - the bloke who does the viewings in cheerful enough

if you choose apartments in Wetherby with a value of £175k - £250k you get 3 returned - the middle one has been up for rent for at least a month for £650 p/m - that includes a £100 p/m service charge - ok, my math was bad and yield is just over 3% but you get my drift

you will also have seen these i posted before (attached)

Why should we feel the tiniest ounce of sympathy for these speculators who were lucky enough only to lose their deposit?

personally i don't - i've speculated and lost before and no-one had sympathy for me or wanted to keep the market artificially afloat to help me

wetherby_flats_to_buy.JPG

wetherby_flats_to_rent.JPG

post-1550-1144574561.jpg

post-1550-1144574657.jpg

Edited by the end is nigh

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Great article ... well worth passing on to friends and relatives who think the only way for prices is up.

There is an article in the Independant today about a couple in their late twenties couple who bought a year ago and would like to start a family. The "financial expert" said they should forget babies as they couldn't get by without two incomes! They wanted to start saving despite their Student debt, credit card debt and a £1500 overdraft to be paid off first!

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This is great news.

Greedy bastards !!

I didn't think of the fact that you could buy a new build have it valued 2 years later and it would be overvalued so you don't get the mortgage. Very risky !!!

I know someone at work that has done this in london se8. There are lots of crappy flats going up there.

Maybe she will loose out. I hope not since she wants to live in it, but saying that she keeps on winding me up with the fact that property prices only go up and it's an investment !!

What bull !!

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Bloody Financial Mail - irritates the cr@p out of me and I NEVER MISS A WEEK! :lol:

The negative equity article was on page 2 of the "Housing Market - Special Report" pull out section.

Page 1 included 2 articles "READY TO ROLL - Higher earners, bigger savings and a surge in confidence.... first-time buyers add bounce to spring's housing revival..." Article goes on to describe how even pessimists no longer think the market is going to crash (funny I thought it was the pessimists and the greedy bastards who wanted it to RISE and suck all remaining money out of the economy... oh well!) and how Steven and Laura have clambered onto the ladder "before it gets out of reach..." There is also the obligatory quote from Wrigglesworthless that I won't even bother to type in...

Congrats to both of them for being the last 2 people to buy property in the UK - EVER!

Second article - "London is back with a vengeance!" More VI bolleaux with an EA saying "Greater London and the South-East are reviving...." They edited out the bit where a used car salesman announced that "Now is the time to buy the used car of your dreams. Buy now before prices ROCKET out of reach. You don't want to miss the boat... There has never been a better time to buy a used car..." Muppets in motion!

People believe what they read in newspapers - but the mixed messages coming across are getting risible. Page 1 = bullish: Page 2 = very bearish. No doubt no one bothered to proof the pull out before it went to press. They look a bit silly now!! :lol:

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This, IMPO, is no different to buying new cars. Joe Public goes and buys one and pays some stupid figure with a few hundred knocked off the price by the dealer if lucky whislt the ame cars are being bought by fleets for a third or sometimes even a quarter of the price.

All the more reason to avoid flats are all costs IMPO.

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theres a sweet sign near my mums. classic 4 storey block of around 22 'luxury flats' built on the town centre site of an old rubber factory. were selling 2004 to the usual crowd of greedy investors and mugs for around £140-160k.

lovely little A4 home printed sign seleotaped in one flat window for last few months.

FLAT FOR SALE

£120k

blah blah help us.

07827 xxxxx

i love to drive past it......

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B.,

They are only ignorant because the chose to be so.

It is not hard to get behind the spin (by finding sites like this one). Anyone putting so much money at risk is foolish not to do some due dilligence

Quite

"every investor has a duty of care to consider their own interests"

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theres a sweet sign near my mums. classic 4 storey block of around 22 'luxury flats' built on the town centre site of an old rubber factory.

Would you really want to live in an old Durex factory? :blink::huh:

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no. they made rubber hoses, gas masks ect.

everyday scottish fetish wear i suppose.

i think the masked tulip had a stall there.

Edited by right_freds_dead

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In 2004, they signed up for a two-bedroom flat.........The property was to be completed in February this year and developer Crosby priced it at £230,000. Crosby offered Adele and Travis a £7,000 discount, making the purchase-price £223,000. They paid a 10% deposit and agreed to buy the flat on completion.

£22,300 deposit!

Securing a property, that doesn't complete for 18mths+, for a £1K or more is bad enough......but to put a down-payment of £22,300 without an independent valuation or a "completion valuation get-out" sounds absolutely crazy.....but hey they did get a £7K "discount"

A fool and his money..............

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coughill070406_100x110.jpg

Take a good look at these folk who lost their deposit on a new build. Pictures like this are going to be all too common soon. These are the same folk who are so proud of themselves when the market it going their way.

The blame game is going to be starting soon.

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SOMETHING I do not understand...

"Their good incomes meant that they could easily borrow the £200,000 needed to complete the deal... Unable to complete the deal, the couple are now resigned to losing their deposit"

IF they can "easily borrow" this amount, why are they "unable to complete"

Arent they like any other couple in negative equity?

In fact, they should thank their lucky stars if they can walk away and ONLY lose the deposit. Had they bought and moved straight in, they would have been truly stuck in negative equity. The reality is, they were speculating on property values going higher, not buying a home to live in.

Why should we feel the tiniest ounce of sympathy for these fortunate property speculators who were lucky enough to lose ONLY their deposit? (the financial literacy of the UK press is appalling)

Thats the part that jumped out for me. They say they wanted to live in the centre of Birmingham assuming their income didn't change then what is the problem. It is a classic example of someone that pretends they are not investing (i.e. it is a home) or if they are investing say they are in it for the long term. However the only reason they have pulled out of this deal must be because it was an investment.

It has been said before but if house prices are static or gently falling then transactions will surely subside if not collapse. It seems to me that alot of purchases are like this couples i.e. for houses / flats they don't really need but are being bought purely to make money.

People will realise in this country one day that the only sustainable way of making money is through investment or hard work and not on get rich schemes that 'propety' has become.

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billy,

Point taken, ignorant would have been a better word. Although part of me agrees with Dr Bubb, I mean when you consider the amount of money that is changing hands...

Hi. I was suggesting that it was part ignorance part stupidity, not that it was 100% one or the either. Ignorance was the cause of their problem. Stupidity was what made them go ahead with the deal despite ignorance.

Billy Shears

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coughill070406_100x110.jpg

Take a good look at these folk who lost their deposit on a new build. Pictures like this are going to be all too common soon. These are the same folk who are so proud of themselves when the market it going their way.

The blame game is going to be starting soon.

Yeah heres another pi$$ed off CLNB fellow:

phell21.jpg

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Thats the part that jumped out for me. They say they wanted to live in the centre of Birmingham assuming their income didn't change then what is the problem. It is a classic example of someone that pretends they are not investing (i.e. it is a home) or if they are investing say they are in it for the long term. However the only reason they have pulled out of this deal must be because it was an investment.

From what I gathered, and perhaps I misread/it was spun, they didn't pull out voluntarily. The mortgage company revalued the property at a lower price when it was completed than they had off the plans. Therefore they wouldn't give them a mortgage for the amount they needed according to the contract with the developer. Presumably they do not have the cash to make up the shortfall.

Buying a place off-plan is IMPO completely mental and a sign of bubble mentality anyway. Stumping up that amount of cash for a place you can't see and that won't even be ready for a year! Heard so many stories of developers screwing buyers over in this situation, it's a huge imbalance of power.

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coughill070406_100x110.jpg

Take a good look at these folk who lost their deposit on a new build. Pictures like this are going to be all too common soon. These are the same folk who are so proud of themselves when the market it going their way.

The blame game is going to be starting soon.

You just know that every evening, she looks at him and say, "I blame you for this"!

:lol:

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You just know that every evening, she looks at him and say, "I blame you for this"!

:lol:

How long till they divorce? :unsure:

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  • 301 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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