Jump to content
House Price Crash Forum
clv101

2 Bed Flat Glut?

Recommended Posts

Just browsing Right Move as you do, I came across a large number of 2 bed flats in Bradley Stoke, the housing estate just North of Bristol with the unfortunate nick name 'Sadly Broke' after a spate a negative equity in the early '90s.

Anyway, do a renting search on www.rightmove.co.uk for flats in BS32 and you'll find ~17 flats mostly 2 bed, almost all of them are in brand new buildings. So who owns these? Are they really going to get £650 a month for them?

Doing a similar search for buying returns basically the same list of brand new properties all with prices around £150-160k.

Here's an example of a renting: http://www.rightmove.co.uk/viewdetails-736...1&tr_t=rent

Here's an example of a buying: http://www.rightmove.co.uk/viewdetails-845...=1&tr_t=buy

How does the economics work for this? A £150k mortgage over 25 years @6% is £977 a month, interest only would be £750!

Share this post


Link to post
Share on other sites

It's even worse in Bristol city centre. The massive new development of flats on Anchor Road are priced at 200k upwards for a 1 bed, and they're renting them for £650 per month :rolleyes:

Share this post


Link to post
Share on other sites

Just browsing Right Move as you do, I came across a large number of 2 bed flats in Bradley Stoke, the housing estate just North of Bristol with the unfortunate nick name 'Sadly Broke' after a spate a negative equity in the early '90s.

Anyway, do a renting search on www.rightmove.co.uk for flats in BS32 and you'll find ~17 flats mostly 2 bed, almost all of them are in brand new buildings. So who owns these? Are they really going to get £650 a month for them?

Doing a similar search for buying returns basically the same list of brand new properties all with prices around £150-160k.

Here's an example of a renting: http://www.rightmove.co.uk/viewdetails-736...1&tr_t=rent

Here's an example of a buying: http://www.rightmove.co.uk/viewdetails-845...=1&tr_t=buy

How does the economics work for this? A £150k mortgage over 25 years @6% is £977 a month, interest only would be £750!

Why is there a picture of a low-security prison on these details and not a picture of the flat?

There's a massive 2bed glut everywhere, isn't there? In Watford I've recently noticed that the £249k the orginal 'yuppie' (ie. cheap halls of residence style) flats is no longer viable.

Here's the hopeful builders/flippers/BTL offloaders:

http://www.rightmove.co.uk/viewdetails-654...=1&tr_t=buy

http://www.rightmove.co.uk/viewdetails-459...=1&tr_t=buy

Take off 5k

http://www.rightmove.co.uk/viewdetails-787...=1&tr_t=buy

Come down further...

http://www.rightmove.co.uk/viewdetails-743...=2&tr_t=buy

There's zillions - come down a bit more...

http://www.rightmove.co.uk/viewdetails-474...=2&tr_t=buy

More...

http://www.rightmove.co.uk/viewdetails-653...=3&tr_t=buy

Second hand? Depreciates like a car, mate...

http://www.rightmove.co.uk/viewdetails-812...=4&tr_t=buy

Or get a mature 3 bed in a posh bit of town...

http://www.rightmove.co.uk/viewdetails-466...=4&tr_t=buy

God, another identikit flat for even lower..

http://www.rightmove.co.uk/viewdetails-124...=5&tr_t=buy

But there's a glut, so price lower again...

http://www.rightmove.co.uk/viewdetails-485...=5&tr_t=buy

Newer developments have long given up on 250k...

http://www.rightmove.co.uk/viewdetails-820...=7&tr_t=buy

Now, it's still not good news. None of these junky flats should be more than 80k tops but there WILL be quite a number people who bought for 250k who would have to lop 10s of k of that to sell today over the zillions of other flats on the market.

It's the start of a bloodbath.

Share this post


Link to post
Share on other sites

Just browsing Right Move as you do, I came across a large number of 2 bed flats in Bradley Stoke, the housing estate just North of Bristol with the unfortunate nick name 'Sadly Broke' after a spate a negative equity in the early '90s.

I've heard that some of the housing in Sadly Broke didn't come out of negative equity until 2001 - can anyone confirm whether this is true?

As an aside, there seem to be a lot of Bristol peeps on this site - which says a lot about FTB predicament in the city. I've met a lot of nurses who've bought recently, with the help of a free loan from HMG. They seem to be propping up the cheaper end of the market, along with the BTL'ers and rich students' parents.

It's the start of a bloodbath.

Yes, it's clear that the experienced money moved out of BTL new builds a few years back, so it's only the BTL amateurs getting their fingers burned now.

Unfortunately, in Bristol BTL on older properties (e.g. 3 bed period houses near city centre) still looks quite viable for the shrewd investors with a large deposit. As do conversions of period properties into flats.

Edited by bugged bunny

Share this post


Link to post
Share on other sites

As an aside, there seem to be a lot of Bristol peeps on this site - which says a lot about FTB predicament in the city. I've met a lot of nurses who've bought recently, with the help of a free loan from HMG. They seem to be propping up the cheaper end of the market, along with the BTL'ers and rich students' parents.

Bristols a bleeding nightmare! Flats are so expensive, i've given up now as i've been priced out unless i fancy living in Fishponds under the motorway!

Share this post


Link to post
Share on other sites

There are gluts of 2 bed flats everywhere. I am living in Bristol, in the process of selling but I am not buying where I'm moving to (Reading) as a) it's relocation so I want to see how things go and B) all the crap they have for sale there is way overpriced even if you are on a high salary. I refuse to pay 40 - 50% of my takehome on ****ing mortgage so I've decided to rent @ £650 pm for now. The developers can take their overpriced prison cells and stick them where the sun don't shine as far as I'm concerned. The previous poster was right, with all the new planning restrictions, apartment blocks now look more like prison blocks - I'm sure even the notorious 'H' block in northern Ireland had wider windows than some of these new builds.

Share this post


Link to post
Share on other sites
I'm sure even the notorious 'H' block in northern Ireland had wider windows than some of these new builds.

There's certainly a serious lack of windows! There are a few of this flat:

The living room facing the kitchen (no windows that way):

9386_AWK3558_IMG_01.JPG

The living room facing the other way (standing in the kitchen I guess):

9386_AWK3558_IMG_06.JPG

Just one small window for a large, long room. Kitchen has no natural light at all!!

Edited by clv101

Share this post


Link to post
Share on other sites

There's certainly a serious lack of windows! There are a few of this flat:

Just one small window for a large, long room. Kitchen has no natural light at all!!

call that a kitchen! i mean if like me, you actually cook that 'kitchen' is useless...especially if you cook fish! phew!

Edited by Rachel

Share this post


Link to post
Share on other sites

call that a kitchen! i mean if like me, you actually cook that 'kitchen' is useless...especially if you cook fish! phew!

and if you opened the window at one end and the door at the other to get a bit of air flowing through the room to blow the pong away, you'd create a wooshing great wind tunnel that'd blow out any lit rings on the hob.

What a horrible characterless room. Even though it's quite large, the room's creating the effect of a shoebox in its dimensions.

Share this post


Link to post
Share on other sites

Swindon has a glut of flats too. Though decent 2 bedroom properties go quickly (if priced lower than the other insane prices)

Share this post


Link to post
Share on other sites

Just browsing Right Move as you do, I came across a large number of 2 bed flats in Bradley Stoke, the housing estate just North of Bristol with the unfortunate nick name 'Sadly Broke' after a spate a negative equity in the early '90s.

Anyway, do a renting search on www.rightmove.co.uk for flats in BS32 and you'll find ~17 flats mostly 2 bed, almost all of them are in brand new buildings. So who owns these? Are they really going to get £650 a month for them?

Especially with the M4 / M5 in Dolby surround sound in much of that area!

Share this post


Link to post
Share on other sites

I've heard that some of the housing in Sadly Broke didn't come out of negative equity until 2001 - can anyone confirm whether this is true?

As an aside, there seem to be a lot of Bristol peeps on this site - which says a lot about FTB predicament in the city. I've met a lot of nurses who've bought recently, with the help of a free loan from HMG. They seem to be propping up the cheaper end of the market, along with the BTL'ers and rich students' parents.

Yes, it's clear that the experienced money moved out of BTL new builds a few years back, so it's only the BTL amateurs getting their fingers burned now.

Unfortunately, in Bristol BTL on older properties (e.g. 3 bed period houses near city centre) still looks quite viable for the shrewd investors with a large deposit. As do conversions of period properties into flats.

We nearly bought in Bradley Stoke a few months ago and prices were absolutely rocketing whilst we were trying to buy. If you didn't get down to see something that had just gone on within a few days, it had been snapped up. We got cold feet because at the end of the day it's still Sadly Broke and inside the armpit of the M4/M5 but the market seemed to have gone mad with investors buying there. When I last looked, everything that had been sold a few months ago is now on the rental market! We're now renting in Gloucestershire where you can get a large detached house for under 700pcm...

Share this post


Link to post
Share on other sites

How does the economics work for this? A £150k mortgage over 25 years @6% is £977 a month, interest only would be £750!

You can bet your bottom dollar that IR rises will take it to well over 1k a month interest only. 1k per month on top of rising tax bills, fuel, car insurance, food bills, tv license, ground rent = reposession.

Renting is the only viable option.

Share this post


Link to post
Share on other sites

I remember seeing the insanity in Sadly Broke in 2004. One estate agent was so busy he couldn't even be bothered to get back to me.

Frankly, I'm not sure I like anything in that area anyway. They're all such horrible modern little boxes. I was renting in Emersons Green at that point and didn't see a huge amount of difference between the two areas.

As for those photos, one word immediately arose in my mind:

Cell.

Share this post


Link to post
Share on other sites

How does the economics work for this? A £150k mortgage over 25 years @6% is £977 a month, interest only would be £750!

I would imagine most property investors will have a sizeable deposit, for example:

they wouldnt pay the full asking price, lets take the national average of 93%

so the purchase price is 148,800

15% minimum deposit for any BTL so its a mortgage of 126,480. I would imagine any cany investor would put up a much larger deposit to reduce the mortgage.

£785pm @ 5.5%

or

£579pm @ 5.5% interest only.

Assuming capital growth of 5% a year (from the latest house price reports)

I can think of better things to do with my money, but I can still understand why people are doing this as house prices continue to rise. The beauty of it is that BTL is virtually tax free if you do it correctly.

Edited by zag2me

Share this post


Link to post
Share on other sites

I would imagine most property investors will have a sizeable deposit, for example:

they wouldnt pay the full asking price, lets take the national average of 93%

so the purchase price is 148,800

15% minimum deposit for any BTL so its a mortgage of 126,480. I would imagine any cany investor would put up a much larger deposit to reduce the mortgage.

£785pm @ 5.5%

or

£579pm @ 5.5% interest only.

Assuming capital growth of 5% a year (from the latest house price reports)

I can think of better things to do with my money, but I can still understand why people are doing this as house prices continue to rise. The beauty of it is that BTL is virtually tax free if you do it correctly.

How about fees when you buy ?

You forgot CGT once sold ?

Your figures are rubbish!!! GCSE Maths more like Micky Mouse Maths

Share this post


Link to post
Share on other sites

15% minimum deposit for any BTL so its a mortgage of 126,480. I would imagine any cany investor would put up a much larger deposit to reduce the mortgage.

£785pm @ 5.5%

or

£579pm @ 5.5% interest only.

Assuming capital growth of 5% a year (from the latest house price reports)

Er no, the canny investor reduces his exposure - he does deals to get the bank to finance as much as possible - that way it's not his money he's playing with.

more likely he does a deal at £148K and gets cashback or whatever to add to his deposit - he will need £22K - so he gets £10K off and puts £15K in, (inc. fees) - brokers will get you there with this deal.

He then has a £126K mortgage - which is £580ish as you say.

However, let's add in voids, service charges (which will eat more than a grand a year anywhere), maintenance, council tax when it's empty, agents' fees - suddenly even at 5% capital growth it's costing you money each month and you carry the debt albatross - is that really a good use of your money - gambling on capital appreciation in a saturated market - yields need to be a good 2% in excess of the mortgage to make these work at current prices without major capital appreciation - otherwise it's short, medium and long term risk for the promise of wealth to come - plus on those figures, your debt is not reducing, it's only gaining (on your model) by the increase in value which is not guaranteed.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.