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I Think I'm Going To Pull Out Of My House Purchase...


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Well....I am in the process of buying a house in Elephant & Castle area....its a lovely house but am really concerned now that I am overpaying for it.

Here's the story...

I am paying the full asking price. There were 2 other offers at full asking at the time, but i was in the best position so I got it.

But I have learnt a few things which make me uneasy:

Firstly the vendor only bought the house recently - he completed on 29 September 2006. I am guessing that he had his offer accepted in June. I now know what price he paid for it (its now on nethouseprices.com). He will have made a 10% gain if the house goes through at my offer! Thats a 10% gain in just 5months.

The agent says that prices have risen sharply in the area. But by this much?

Secondly I didnt know this when I put the offer in but the house is ex localauthority and both my neighbours would be council tenants. They may be fine now, but what if they change in the future?

And thirdly my survey has revealed a few problems. Nothing too serious, but enough in my view to take off £5k off the price.

Anyway, I sent all these concerns to the vendor via the estate agent, and surprise surprise the vendor is not willing to budge on the price (I suggested a 4% reduction), and believes that he will be able to get an even higher price if he puts it back on the market. He may well be right as houses seem to be flying off the shelves.

So not sure what to do....

I'm starting to think that there is no discount any more in buying in elephant & castle ie all the prices already reflect the future regeneration plans. I really feel like I am overpaying for it.

I'm also starting to question whether in fact I should tie myself down to such a big mortgage (4.4 times current income). I am half thinking of changing career. Buying this house could make this impossible....

I have also spent quite a lot on the survey, valuation, and other fees so this is going to be an expensive lesson if I walk away now.

Perhaps I've been reading this forum too much! Its scary reading....

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Guest Charlie The Tramp

Secondly I didnt know this when I put the offer in but the house is ex local authority and both my neighbours would be council tenants. They may be fine now, but what if they change in the future?

That`s always the danger. Personally I would not touch any ex LA property in the Elephant and Castle, come to think of it from my days working in the area I would not touch property there full stop.

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Well....I am in the process of buying a house in Elephant & Castle area....its a lovely house but am really concerned now that I am overpaying for it.

You've got to ask yourself - if you can only buy in an area like Elephant and Castle is it really worth doing?

And I speak as somone that has been there - I used to get woken up by gun shot as lived in a house that backed onto Tulse Hill estate.

Council tenants can be a nightmare, maybe not the ones next door but in general.

Go rent in a nice area and enjoy your life.

There's no money to be made buying there now.

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I am half thinking of changing career. Buying this house could make this impossible....

..and to add to this point. I've just gone back to uni this sept.

This has only been possible because I didn't buy and use the money saved. Instead I'm spending it on a career change and I've never been happier.

Out of London, out of the rat race.

There's so much more to life than owning your own crap flat in a shitty London borough

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I can absolutely see why you're having doubts, you need to ask yourself why the vendor is getting out so quickly, after all it isn't such a huge profit when you take off fees and stamp duty. I don't know what your finances are, but if you need to take out a 4.4 times mortgage you're probably stretching yourself -just think how much less the neighbours are paying!

Is an ex-council house really worth putting your life on hold, this time it's your job, but what else will it be in the future?

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This house isnt your run of the mill ex local authority house - its a grade 2 listed georgian terrace. It never crossed my mind when I put the offer in that my neighbours would be council tenants...but it is a major concern about what any future tenants may be like.

I dont mind the area - i live there now. Its very convenient. But prices are now getting close to much nicer areas like kennington which to me doesnt make sense.

At the mo I'm very cash rich - i prob have enough money in the bank to have 2 years off if i wanted. I was thinking I could try a new direction career wise. Maybe thats more important about life rather than struggling to afford a nice house in a career that I hate...(although i'm 30 so thinking i could be too old for a career change now). I'm currently an accountant btw.

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At the mo I'm very cash rich - i prob have enough money in the bank to have 2 years off if i wanted. I was thinking I could try a new direction career wise. Maybe thats more important about life rather than struggling to afford a nice house in a career that I hate...(although i'm 30 so thinking i could be too old for a career change now). I'm currently an accountant btw.

Never too old to change and 30 is not old.

I'm 30 and have just started a 4-year chiropractor course.

Better to be happy and doing what you want

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Guest Charlie The Tramp

This house isnt your run of the mill ex local authority house - its a grade 2 listed georgian terrace.

Ah it`s a little clearer now some bought by the council to rehouse people on their waiting list.

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Are you buying freehold or would you be leaseholding from the local authority? It's possibly freehold if it is on its own plot.

If leasehold and it is Southwark be warned, they are a f***ing terrible council and are notorious for screwing money out of leaseholders via dodgy service charges and dubious section 20 "repairs" and "improvements".

I used to be a Southwark leaseholder of an ex-council flat near E&C. Sold up in 2004.

Oh yeah and if you haven't already discovered, the postal service in SE1 is abysmal. Expect to get half your post stolen and used in ID fraud. It happened to mistress frug. while we lived round there.

frug.

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Why is he selling so soon after buying? Is he a flipper? If not there must be pressing personal reasons for selling. Think of the stress and upheavel and expense he's putting himself through.

Paying premium prices, at the height of the most extreme of property booms, for a house in E&C, which requires repairs, and bordered either side by council tenants ? Sounds like a recipe for disaster to me. But it's a matter for you.

Have you been to the area at 11pm? You may find a few answers.

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Council tenants can be a nightmare, maybe not the ones next door but in general.

In our block there was a nutty huge Glaswegian transexual guy/girl with an american boyfriend and two massive Alsatians (and a cat called mimi). They were always screaming at each other and threatening the other neighbours. Eventually they were hounded out of the area amid shouts of "paedophile". But then they sublet the flat to some apparent junkies who played the drums all night. In another flat in the block was a middle aged couple who consumed nothing but bottles of cheap vodka. One evening I came back to see smoke billowing out of their flat window, they'd passed out with the hob on or something. Their entire flat was completely gutted. Luckily due to the solid concrete construction of the block the other flats were not affected, but the stairwell had a smoky tinge to it thereafter.

Still, made about 50k in 2 1/2 years.... with about 10k's worth of DIY, not bad.

frug.

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Firstly the vendor only bought the house recently - he completed on 29 September 2006. I am guessing that he had his offer accepted in June. I now know what price he paid for it (its now on nethouseprices.com). He will have made a 10% gain if the house goes through at my offer! Thats a 10% gain in just 5months.

10% gain in 5 months - it really isn't going to be different this time! ;)

Run, don't walk, away from this one.

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I can do better than that.

A house on my street was bought for 270 (the ballpark going rate according to the LR) 3 months ago. Now on for 400. These figures are not exact but not far off.

You may think that someone's having a laaarf, and you'd be wrong. Whoever's flipping it has put in a nice new kitchen, repaired the window frames, redecorated in a neutral styley, and put a big brass knocker on the door. Obviously you will not get much change out of £130k for that little lot. I might just have to mosey down to the local EA and make an offer at full asking right now, before it rockets to half a mill.

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I can do better than that.

A house on my street was bought for 270 (the ballpark going rate according to the LR) 3 months ago. Now on for 400. These figures are not exact but not far off.

You may think that someone's having a laaarf, and you'd be wrong. Whoever's flipping it has put in a nice new kitchen, repaired the window frames, redecorated in a neutral styley, and put a big brass knocker on the door. Obviously you will not get much change out of £130k for that little lot. I might just have to mosey down to the local EA and make an offer at full asking right now, before it rockets to half a mill.

These cases should be ringing some loud bells with anyone who can remember the late 80s. I recall stories on the 9'oclock news with very similar tales - people buying a house in London, do very little and sell 3-4 months later for 10% profit. I now firmly believe that we are presently in the suckers rally phase and a severe downturn in 2007 is now certain.

Edited by redalert
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Because, actually I don't think anyone should be replying to a question like this, that directly affects an individuals circumstances, when none of us know anything about the person or the house he/she or it is buying.

Maybe he intuitively knows that he doesn't want to go through with this, so wants to kind of "rationalise" it by making sure other people also wouldn't go through with it either.

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Well I've just withdrawn from the sale.

I'm not sure how I feel right now.....i just hope it turns out to be the right decision.

fair play to you, with the info you've shared i think you may have made the right choice.

but to be fair if you'd asked the same question 3 years ago on this site you would have had the same 'don't do it, are you mad!' etc responses.

asking a question like this on this forum in particular and expecting an unbiased, levelheaded response is pretty much wishful thinking imo. Big life decisions are best not left to VI's of any kind.........

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Maybe he intuitively knows that he doesn't want to go through with this, so wants to kind of "rationalise" it by making sure other people also wouldn't go through with it either.

Hope it works out for you.

Since you were already having second thoughts it's probably for the best.

Good luck and feel free to join us, we are not all raving mad!

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Well....I am in the process of buying a house in Elephant & Castle area....its a lovely house but am really concerned now that I am overpaying for it.

Here's the story...

I am paying the full asking price. There were 2 other offers at full asking at the time, but i was in the best position so I got it.

But I have learnt a few things which make me uneasy:

Firstly the vendor only bought the house recently - he completed on 29 September 2006. I am guessing that he had his offer accepted in June. I now know what price he paid for it (its now on nethouseprices.com). He will have made a 10% gain if the house goes through at my offer! Thats a 10% gain in just 5months.

The agent says that prices have risen sharply in the area. But by this much?

Secondly I didnt know this when I put the offer in but the house is ex localauthority and both my neighbours would be council tenants. They may be fine now, but what if they change in the future?

And thirdly my survey has revealed a few problems. Nothing too serious, but enough in my view to take off £5k off the price.

Anyway, I sent all these concerns to the vendor via the estate agent, and surprise surprise the vendor is not willing to budge on the price (I suggested a 4% reduction), and believes that he will be able to get an even higher price if he puts it back on the market. He may well be right as houses seem to be flying off the shelves.

So not sure what to do....

I'm starting to think that there is no discount any more in buying in elephant & castle ie all the prices already reflect the future regeneration plans. I really feel like I am overpaying for it.

I'm also starting to question whether in fact I should tie myself down to such a big mortgage (4.4 times current income). I am half thinking of changing career. Buying this house could make this impossible....

I have also spent quite a lot on the survey, valuation, and other fees so this is going to be an expensive lesson if I walk away now.

Perhaps I've been reading this forum too much! Its scary reading....

I looked into E&C myself earlier this year ago and had the feeling I'd missed the boat. An old mate of mine used to work at an agent in Kennington and reckoned that a couple of really shrewd investors had bought up all the desirable period properties within 8-10 minutes of the tube (backing on to the redevelopment). I was looking at sh@te 15 minutes walk+ down the Walworth Road and if where you're looking at is there, I'd walk away now as it will stay horrid.

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