New Build -30% Loss In Two Years

[The Undertaker]

Just sold today for £216,000

Flat 9, Christopher Court, 90 Great North Way, Hendon, London, NW4

http://www.barnardmarcusauctions.co.uk/ (have a look at lot 2)

Now I took the liberty of using rightmove to check out what this property sold for originally:

(The postcode is NW4 1he)

Ironically he/she purchased it on April Fool's day 2004- for £325,000.

Now thats a LOSS of £109,000 (excluding interest, mortgage fees, stamp duty, etc etc).

And you can never lose buying property?

[Killer Bunny]

Now I took the liberty of using rightmove to check out what this property sold for originally:

Suggest you look on ourproperty.co.uk to find real original buy price

[Seamaster]

Just sold today for £216,000

Flat 9, Christopher Court, 90 Great North Way, Hendon, London, NW4

Now I took the liberty of using rightmove to check out what this property sold for originally:

Ironically he/she purchased it on April Fool's day 2004- for £325,000.

Now thats a LOSS of £109,000 (excluding interest, mortgage fees, stamp duty, etc etc).

And you can never lose buying property?

I'm as bullish as the next bloke, but how on earth was that place ever worth £325K, FFS?!? That has to be a ****-up, surely?

Suggest you look on ourproperty.co.uk to find real original buy price

Just did:

01/04/2004

Flat 9, 90 Christopher Court Great North Way, Barnet, London, Greater London, NW4 1HE

£325,000

Edited April 26, 2006 by Seamaster

[Bingley Bloke]

Brilliant

I'd love to see Kirstie Allsop try to put some spin on that

[jp1]

I'm as bullish as the next bloke, but how on earth was that place ever worth £325K, FFS?!?

That has to be a ****-up.

Prices are a matter of opinion, but the £109K debt is very real.

Doh! - and nothing to MEW to pay it!

[The Undertaker]

I just looked it up on ourproperty.co.uk, but got beaten to it by Seamaster.

Note that the property was being sold by the mortgagee. You reckon the bank will let them off the rest of the money?

[CrashConnoisseur]

You reckon the bank will let them off the rest of the money? [The Undertaker]

The bank may not have any choice.

[Guest Fiddlesticks]

You reckon the bank will let them off the rest of the money? [The Undertaker]

The bank may not have any choice.

You can see why banks are pulling out of lending on new builds.

[Tempest]

You reckon the bank will let them off the rest of the money? [The Undertaker]

The bank may not have any choice.

No - the Bank has every choice - secured debts (like student loans) cannot be avoided by Bankrutpcy. The bank can still come after you years later (attach earnings, wait for your situtation to improve etc) unless you do a deal with them. My advice if you are in this boat? Be one of the first to do a deal with them/IVA while the credit cycle has yet to tighten -because when the repo avalanche starts they won't be so considerate.

[Cornwall Sceptic]

Just sold today for £216,000

Flat 9, Christopher Court, 90 Great North Way, Hendon, London, NW4

http://www.barnardmarcusauctions.co.uk/ (have a look at lot 2)

Now I took the liberty of using rightmove to check out what this property sold for originally:

(The postcode is NW4 1he)

Ironically he/she purchased it on April Fool's day 2004- for £325,000.

Now thats a LOSS of £109,000 (excluding interest, mortgage fees, stamp duty, etc etc).

And you can never lose buying property?

Excellent find Undertaker

Look at lot 154

loss of £122,000 in just under 2 years - Halifax repo

How many more private BTL'ers will be in trouble

CS

[BillyShears]

It's not just the muppet who has lost. If the property has sold at a new lowest price for the type of property and area, then the other people around him will have seen their paper wealth go down.

Edit: 104 Larchmont Road from today's auction is in my local area. Looking forward to seeing how much that sells for. Guide price is 134K. Anything less than 150-160K and it's crash-a-delic baby.

Billy Shears

Edited April 26, 2006 by BillyShears

[Cornwall Sceptic]

It's not just the muppet who has lost. If the property has sold at a new lowest price for the type of property and area, then the other people around him will have seen their paper wealth go down.

Edit: 104 Larchmont Road from today's auction is in my local area. Looking forward to seeing how much that sells for. Guide price is 134K. Anything less than 150-160K and it's crash-a-delic baby.

Billy Shears

Accoring to teh auctioneers it went for 146

[BillyShears]

Accoring to teh auctioneers it went for 146

I was just searching for this thread after spotting that on the auction site.

146K for a five bedroomed house in that area, that's a massive drop from a year or two ago when 170K would have been a typical sale price.

And as that house is less than 1/4 of a mile from mine, I'd been over to have a look. It's a newish development, and for sale boards were growing like mushrooms on a pile of sh*t. Asking prices are still high but the one house with a lower asking price than many, 160K, still seems to be sticking. I thought it might be the same house, but maybe not:

http://www.rightmove.co.uk/viewdetails-438...pa_n=1&tr_t=buy

This explains a lot of what I see around me. Watching rightmove has shown the same. Houses are still selling around here, but only the competitively priced houses. People are trying to ask peak prices, and it ain't happening.

Billy Shears

[Cornwall Sceptic]

I was just searching for this thread after spotting that on the auction site.

146K for a five bedroomed house in that area, that's a massive drop from a year or two ago when 170K would have been a typical sale price.

And as that house is less than 1/4 of a mile from mine, I'd been over to have a look. It's a newish development, and for sale boards were growing like mushrooms on a pile of sh*t. Asking prices are still high but the one house with a lower asking price than many, 160K, still seems to be sticking. I thought it might be the same house, but maybe not:

http://www.rightmove.co.uk/viewdetails-438...pa_n=1&tr_t=buy

This explains a lot of what I see around me. Watching rightmove has shown the same. Houses are still selling around here, but only the competitively priced houses. People are trying to ask peak prices, and it ain't happening.

Billy Shears

Billy

If I had the time I'd go through more of those properties on the auction site - did you notice how many didn't sell (not making reserve at auction 2 years ago nearly everything sold)

Leicester has changed a lot since I worked there (16 yrs ago)

Did you see lot 154

New build flat in Brum B16 bordering on Edgabaston bought for £250k sold today by Halifax at £128k - loss of £122,000 in just under 2 years

Halifax must have no confidence at all in the new build market in Brum to sell at just over 50% of original value - with unpaid mortgage payments default fees legal fees if they had to obtain possession through the court must hav pushed their exposure up another 20 -30k if they owners were FTBs on 100% they are circa £150K down if BTL at 85% LTV circa £120k down - ouch

Brum and Leicester have similar demographics in population - are there many new build flats in the City Centre? - what is happeninmg to those?

CS

[Red Baron]

Huge losses on flats (sorry, 'luxury apartments') does not surprise me.

Always the first to attract ridiculous premiums in boom time they are also the first to collapse in price when there is a downturn. In the last crash you could not give them away.

What's different this time?

[right_freds_dead]

you could always extend them or add a conservatory.

[BillyShears]

Billy

If I had the time I'd go through more of those properties on the auction site - did you notice how many didn't sell (not making reserve at auction 2 years ago nearly everything sold)

Leicester has changed a lot since I worked there (16 yrs ago)

Did you see lot 154

New build flat in Brum B16 bordering on Edgabaston bought for £250k sold today by Halifax at £128k - loss of £122,000 in just under 2 years

Halifax must have no confidence at all in the new build market in Brum to sell at just over 50% of original value - with unpaid mortgage payments default fees legal fees if they had to obtain possession through the court must hav pushed their exposure up another 20 -30k if they owners were FTBs on 100% they are circa £150K down if BTL at 85% LTV circa £120k down - ouch

Brum and Leicester have similar demographics in population - are there many new build flats in the City Centre? - what is happeninmg to those?

CS

I went to an auction in Leicester. A lot of properties that had quite high bids didn't sell for not meeting their reserve. Even some that reached the guide price. But that doesn't seem to have been the case in the auction that we're discussing.

There are a lot of newbuild flats going up all over the place. I walk to work along the Groby round through Woodgate/Frog Island, and that seems to be one of the popular newbuild areas. There are also a lot of flats along the canal and towards the city centre. And there's a massive development fairly near the bus station. And there seem to be frequent articles in the local paper about even more flats being built. So no shortage of new builds around. I haven't actually followed what's happening with those flats in terms of prices. Though I did find it quite amusing seeing these "lifestyle" flats being advertised in shop windows for rents that I'd expect a 3 bed semi for, and in the windows of student accomodation agencies.

Going back to the auction. I notice the unsold properties. Look at Lot 11. Has an income of 4.3K per year, and was unsold despite a bit of 199K. Who the hell bid enough for the rent to be a 2.2% gross return? And who the hell didn't take the bid?

Though a lot of the properties didn't achieve prices that made the yields too small. I see some where bidding ended when the yield would still be good at the final bid amount. Compared to what I've seen, it looks like the bidders were pricing in capital depreciation into their calculations.

But the sold properties were even weirder. Lot 12 sold for 247K, with a 137K income. That's over 50% yield. Why no higher bids?

Lot 47. Sold for 664K with a £12300 income. That's less than 1.9% gross return! Someone's banking on capital appreciation if that's for investment.

A lot of residential properties sold with yields in the 4-5% range.

Lots 66 and 67. Doesn't look like pubs are very popular does it?

Lot 120. Looks like it is still possible to get decent yields. >18% on a 29K investment. But a one bed with no tenant goes for 12K? I suppose that at the very low end of the market maintenance and other costs would eat into "returns" at a higher percentage than for more expensive property.

Too late to make much of an effort to analyse all this. Time for bed.

Billy Shears

Edited April 26, 2006 by BillyShears

[George]

same here but looking at -£17k over 1 year not 100k!

[Cornwall Sceptic]

I went to an auction in Leicester. A lot of properties that had quite high bids didn't sell for not meeting their reserve. Even some that reached the guide price. But that doesn't seem to have been the case in the auction that we're discussing.

There are a lot of newbuild flats going up all over the place. I walk to work along the Groby round through Woodgate/Frog Island, and that seems to be one of the popular newbuild areas. There are also a lot of flats along the canal and towards the city centre. And there's a massive development fairly near the bus station. And there seem to be frequent articles in the local paper about even more flats being built. So no shortage of new builds around. I haven't actually followed what's happening with those flats in terms of prices. Though I did find it quite amusing seeing these "lifestyle" flats being advertised in shop windows for rents that I'd expect a 3 bed semi for, and in the windows of student accomodation agencies.

Going back to the auction. I notice the unsold properties. Look at Lot 11. Has an income of 4.3K per year, and was unsold despite a bit of 199K. Who the hell bid enough for the rent to be a 2.2% gross return? And who the hell didn't take the bid?

Though a lot of the properties didn't achieve prices that made the yields too small. I see some where bidding ended when the yield would still be good at the final bid amount. Compared to what I've seen, it looks like the bidders were pricing in capital depreciation into their calculations.

But the sold properties were even weirder. Lot 12 sold for 247K, with a 137K income. That's over 50% yield. Why no higher bids?

Lot 47. Sold for 664K with a £12300 income. That's less than 1.9% gross return! Someone's banking on capital appreciation if that's for investment.

A lot of residential properties sold with yields in the 4-5% range.

Lots 66 and 67. Doesn't look like pubs are very popular does it?

Lot 120. Looks like it is still possible to get decent yields. >18% on a 29K investment. But a one bed with no tenant goes for 12K? I suppose that at the very low end of the market maintenance and other costs would eat into "returns" at a higher percentage than for more expensive property.

Too late to make much of an effort to analyse all this. Time for bed.

Billy Shears

Agree to late for futher investigation I'll see what I can glean tomorrow or is it today?

CS

[ca-uk]

25 out of the 175 were for halifax.

will these all be as a result of reposessions? i notice a couple had halifax for sale signs out front so i guess they try to sell them first? obviously they're not flying off the shelves fast enough so they are auctioning them?

[Seamaster]

This explains a lot of what I see around me. Watching rightmove has shown the same. Houses are still selling around here, but only the competitively priced houses. People are trying to ask peak prices, and it ain't happening.

Exactly the same to be seen round here.

My EA warned me against "taking the p¡ss" when discussing what I should ask for the place I just sold. I put it on at the valuer's price, no more, no less, and it sold within a couple of weeks. The only other two apartments available right now in the same building (not a new build) have remained unsold for months, because the sellers are continuing to ask daft money for them.

If there is a "crash", it will be a crash of greed, which will only affect asking, not selling prices.

Edited April 27, 2006 by Seamaster

[tahoma]

If there is a "crash", it will be a crash of greed, which will only affect asking, not selling prices.

Gosh. That will be the first time in ages greed has entered the property market. What a shame.

Thanks for the heads up though. Your opinion is really valuable.

[ajh]

I was just searching for this thread after spotting that on the auction site.

146K for a five bedroomed house in that area, that's a massive drop from a year or two ago when 170K would have been a typical sale price.

And as that house is less than 1/4 of a mile from mine, I'd been over to have a look. It's a newish development, and for sale boards were growing like mushrooms on a pile of sh*t. Asking prices are still high but the one house with a lower asking price than many, 160K, still seems to be sticking. I thought it might be the same house, but maybe not:

http://www.rightmove.co.uk/viewdetails-438...pa_n=1&tr_t=buy

This explains a lot of what I see around me. Watching rightmove has shown the same. Houses are still selling around here, but only the competitively priced houses. People are trying to ask peak prices, and it ain't happening.

Billy Shears

Holy Dooley.

When I was last in the UK (2004), mum and I went at looked at just about an identical design to that, newbuild in Lichfield (Birmingham area but a nice town, never industrialised). They wanted 219K with one garage.

So your saying in Leicester you can get them for about 150K now? Hmmmmmmmm, I wonder how much of the difference is land value?

[Solvent Celt]

No - the Bank has every choice - secured debts (like student loans) cannot be avoided by Bankrutpcy. The bank can still come after you years later (attach earnings, wait for your situtation to improve etc) unless you do a deal with them. My advice if you are in this boat? Be one of the first to do a deal with them/IVA while the credit cycle has yet to tighten -because when the repo avalanche starts they won't be so considerate.

Yes and no.

Bankruptcy will not void the rights of a secured creditor to realise their security but once their security has been realised (as per this case having sold the property/security) then they join the queue for the shortfall along with the rest of the unsecured creditors.

That being the case they cannot come after years later.

IMHO an IVA is rarely worth doing as you can often have the IVA fail (after struggling to make the monthly payments for years) and be made bankrupt anyway. For 9 out of 10 people it is better (and cheaper) to bite the bullet and file for bankruptcy in the first place.