Middlesbrough

[Northern Boy]

A number of my friends has bought around the Middlesbrough and Stockton area over the last year or so.

One bought an ex-council property in a really bad area for £55k (up from about £17k 5 years ago!), another friend has bought a 1 bed!! flat for £95k (cashback and free mortgage for a year!!).

Another close friend is now considering buying a two bed semi for £120k!! I'm trying to convince him not to!!

I'm currently renting a three bed (new build) for £550 a month, the mortgage is around £850 over thirty years. So unless the landlord put down a big deposit they are loosing money each month, hoping for capital gains!!

The development has has a couple of houses for sale for the last six months, at £155k, even if they dropped the price to £150k and managed a sale they wouldn't have made a penny!!

Considering the average salary for the area is around £18k I don't believe prices can go any higher. I've been watching properties for the last year and none have gone up in price, they are dropping by £3/5k because they are taking so long to sell.

Rent remain static, I know that atleast 6 of the houses (of which there is 30 on this development) are BTL. Three of which are up for rent at the mo for £595!! We got ours for £550 as the landlord had waited 4 months for a tenant. The world of BTL is truely insane!! I believe it is only this that has kept the market at such levels.

Now the sentiment is changing with interest rates rising I assume that BTL will falter and prices will come down. To add to this, they have been building two bed apartments, selling for £125k (5% deposit paid and all that), now they are strugging to sell them they have dropped to £115, some people have lost £10k in a year. So much for its better to buy than rent?!?

There are 24 apartments due to be completed in the next month or so and only 7 have sold, no more BTL t prop then up...

Anyway, getting to the point, I did some maths to try and convince my friend, the results are as follows...

He buys and I rent, I pay the difference into savings and in 5 years time he has paid of around 8% of his mortgage. So I have saved around £20k and he has £28k in equity. This is assuming prices rise by 2% pa in line with inflation (which I doubt considering no rise in the last year!!). If prices were to drop 5% then the difference between his equity and my savings is zero!! Hence, I think it better to hold out and see where the market goes.

Even better, assume prices stagnate (rent and house prices), again I save the difference and he buys. After 5 years he has around £12k equity, again I have £20k savings. I then take out a 25 year mortgage (he would have taken out 20) with a 20k deposit. Assuming the same rates apply in 5 years then in total I would have paid £265k for the property and he would hae paid £315k!! £50k difference because I waited and rented for 5 years. THIS IS WHAT I AM HOPING FOR AND THINK IT IS MORE THAN LIKELY!!

Even better, prices stagnate and drop 5/10/20% in the next 5 year!! You don't have to be a genius to work it out. People don't realise that mortgages are front end loaded with interest an that they pay very little of the capital at the start. They assume I've paid in £10k, so I've knocked £5k of the capital, this just isn't the case.

THE OTHER SIDE OF THE ARGUEMENT IS:

Prices rise with inflation (2%!!!!!??) and don't drop - you would have been better buying.

Prices rise at a much higher rate than inflation (10%!!!!) - you would have been better buying.

IMHO neither of these will happen, especially in the North East, where the top of the market has been reached and passed due to BTL. Plus all the MEW and rising interest rates will push people over the edge.

We simply don't have the supply and demand problem of the South, if we did their wouldn't be houses and apartments up for rent and sale for six months+..

Please feel free to add to this or try and pull my arguement/ figures apart..

Northern Boy

[Fancypants]

We simply don't have the supply and demand problem of the South, if we did their wouldn't be houses and apartments up for rent and sale for six months+..

Smoggy - don't believe the hype - there's not so much of a supply/demand problem down here either.

I grew up in Middlesbrough, and prices there nowadays make my teeth bleed. You're doing absolutely the right thing.

[the end is a bit nigher]

Sounds a pretty good synopsis to me - fundamentally comes down to what prices do in the future, how much you can save in the meantime and how desperate you are to be on the ladder / snake

Edited February 4, 2007 by the end is nigh

[adamUK]

Where abouts in the boro?

With ingleby barwick 'the nations largest housing estate' still growing as fast as developers can chuck half-arsed houses together I have always been astonished that house prices have grown here. I keep an eye on eaglescliffe and ingleby and to be honest not much has shifted in the last 6 months or so unless its right at the bottom of the market.

In fact, its good to see prices dropping, this fella's converted a nice victorian semi and split into 2 flats. First on the market for £190k, then £184k and now £179,950. hahahahahaa..

Edited February 4, 2007 by adamUK

[Northern Boy]

Where abouts in the boro?

With ingleby barwick 'the nations largest housing estate' still growing as fast as developers can chuck half-arsed houses together I have always been astonished that house prices have grown here. I keep an eye on eaglescliffe and ingleby and to be honest not much has shifted in the last 6 months or so unless its right at the bottom of the market.

In fact, its good to see prices dropping, this fella's converted a nice victorian semi and split into 2 flats. First on the market for £190k, then £184k and now £179,950. hahahahahaa..

INGLEBY BARWICK

[adamUK]

INGLEBY BARWICK

Are you pregnant?

[Guest grumpy-old-man]

A number of my friends has bought around the Middlesbrough and Stockton area over the last year or so.

One bought an ex-council property in a really bad area for £55k (up from about £17k 5 years ago!), another friend has bought a 1 bed!! flat for £95k (cashback and free mortgage for a year!!).

**snipped**

IMHO neither of these will happen, especially in the North East, where the top of the market has been reached and passed due to BTL. Plus all the MEW and rising interest rates will push people over the edge.

We simply don't have the supply and demand problem of the South, if we did their wouldn't be houses and apartments up for rent and sale for six months+..

Please feel free to add to this or try and pull my arguement/ figures apart..

Northern Boy

hey NB, it's nice to get some real feedback from someone still living up, there. My parents are up in Stockton but are not sure or interested anyway...more fool them eh?

we lived in Stockton for 20 years & it just got worse & worse.....it's a very depressed area (boro too) imo. some friendly people though.

Yarm & Eaglescliffe were the best areas & poss hartburn as well.

that Barwick estate in Thornaby was huge when we left the area in 2000, god knows how big it is now....does it still take 15 mins to get off the estate in the morning ??

the crash is defenetly being driven from the North isn't it ? we have a similar story to tell in Wakefield re buying & renting

[Guest grumpy-old-man]

Smoggy - don't believe the hype - there's not so much of a supply/demand problem down here either.

I grew up in Middlesbrough, and prices there nowadays make my teeth bleed. You're doing absolutely the right thing.

smog monster indeed.

I always know when I have hit the boro as you can't see the signs on the A19.

what's happened to ya avatar FP ?

[adamUK]

that Barwick estate in Thornaby was huge when we left the area in 2000, god knows how big it is now....does it still take 15 mins to get off the estate in the morning ??

I still get lost in Ingleby Barratt and it's almost impossible to navigate round since all houses there look the same.

[peemac]

we have a similar story to tell in Wakefield re buying & renting

Where abouts in wakefield are you?

I moved away years ago but my family all still live there, I occasionaly check prices on rightmove and am astonished. Houses on Lupset marketed at £130k+

I grew up around there and for much of that time it resembled downtown Beirut, not much has changed from what I can see. The only positive with those places is that they're reasonably big and have decent sized gardens, although all the schools around there are poor and there are serious drugs problems still from what I can gather.

I'm in Birmingham now and IMO houses down here whilst still expensive are much better value than they currently are in Wakefield, which must have been driven by people being driven out by high prices in Leeds. When I go home to visit family I walk around the town centre and it seems obvious to me that Wakefield isn't a city where people earn enough to pay £130k+ for ex-council houses.

[Guest grumpy-old-man]

Where abouts in wakefield are you?

I moved away years ago but my family all still live there, I occasionaly check prices on rightmove and am astonished. Houses on Lupset marketed at £130k+

I grew up around there and for much of that time it resembled downtown Beirut, not much has changed from what I can see. The only positive with those places is that they're reasonably big and have decent sized gardens, although all the schools around there are poor and there are serious drugs problems still from what I can gather.

I'm in Birmingham now and IMO houses down here whilst still expensive are much better value than they currently are in Wakefield, which must have been driven by people being driven out by high prices in Leeds. When I go home to visit family I walk around the town centre and it seems obvious to me that Wakefield isn't a city where people earn enough to pay £130k+ for ex-council houses.

we live in Ossett now (renting), but we sold on Benton park estate Horbury, right next to Lupset.....I know what you mean about prices on that estate.

There are some new builds right in the main Lupset road (Airedale Heights iirc) & we went to look at a house on their in 2000 when we moved down....the guy who showed us the house was an ex prison officer & he said "you seem like a nice family, don't buy on here". To be honest we wouldn't have bought anyway but it was nice of him to tell us anyway.

I am actually from a council estate originally many years ago (a proper working class family background), but these estates have changed now & are unrecoverable imo. We feel very sorry for the nice families that are trapped on these types of estates.

edited to add - I aggree re the comment about wakey city not supporting wages to enable £130k +

Edited February 4, 2007 by grumpy-old-man

[Northern Boy]

Are you pregnant?

No, Why? Saying that I prob's look it with all the beer lately..

[Northern Boy]

hey NB, it's nice to get some real feedback from someone still living up, there. My parents are up in Stockton but are not sure or interested anyway...more fool them eh?

we lived in Stockton for 20 years & it just got worse & worse.....it's a very depressed area (boro too) imo. some friendly people though.

Yarm & Eaglescliffe were the best areas & poss hartburn as well.

that Barwick estate in Thornaby was huge when we left the area in 2000, god knows how big it is now....does it still take 15 mins to get off the estate in the morning ??

the crash is defenetly being driven from the North isn't it ? we have a similar story to tell in Wakefield re buying & renting

There's a new road over the tees from Stockton, so takes me 5 mins to get to A66. They're still building, think they're getting to the point of having no more land now. So they've started on the opposite side of the river near all the car garages, which is a little bit stupid, bit like living in the middle of an industrial estate.

[adamUK]

No, Why? Saying that I prob's look it with all the beer lately..

I have come to the conclusion after plodding around Tesco's in Ingleby Barwick that it's the place where people on Teesside go to spawn... a bit like those salmon that swim upstream to one specific breeding ground. I just couldn't believe how many pregnant women there was in there. It must be as soon as you touch down in Ingleby, your gf gets up the duff... I just wanted to see if my suspicions were correct.

[AteMoose]

houses in boro have risen quickly, but they also crashed badly last time. However they are still cheap compared to the rest of the country, its a depressed area, ici and the decline of uk industry doesnt help. However compared to the rest of the country, and the rest of of southern and midland monkeys its still shockingly cheap. Even though wages up north are lower, you cant get lower than the minimum wage....

a couple min wage, 10k a year each and a 4k deposit, can borrow upto 76k, and get an ok place

a single guy with a 4k deposit on the min wage can borrow upto 47k, and get an ex council place

http://www.alliance-leicester.co.uk/mortga...dex.asp#summary

In middlesbrough a single person on the min wage can still buy a property on there own, something that is impossible everywhere else in the country. If somone on min wage can buy a property, it means it could go higher. In, places like brighton, london, somone on a high wage struggles to find anything, people on the min wage in the areas were left in the dust 8->10 years ago.....

property after the last crash was really really cheap, some areas have been cheap and some areas will always stay cheap...

@norther boy : most BTL are interest only, btlers are interested in the rent covering the morgage and a lil bit extra to take as profit. The little bit extra is taxed, the IO morgage on 150k is about 600 a mounth, but if they bought the place a few back they may have a lower deal. Even so a yeild of 5.5% ish there doing ALOT better than other BTLers. Boro still seems cheap compared to the rest of the uk, and the rent on your house, just about covers the morgage, again something that doesnt happen in most other places in the uk. Boro feels about 4-5 years behind the rest of the uk, dont forget prices could go higher and catch up....

boro :

http://www.home.co.uk/guides/house_prices_...rough&all=1

look at the price of terraces.

The housing market works on momentum, prices have continued to rise in boro over the past two years, in fact the price of a terrace has more than doubled in the past twp years! in most other parts of the country they have fallen, look and comparem to the graph of worcester:

http://www.home.co.uk/guides/house_prices_...ester&all=1

sold prices of terraces actually fell, and have only recently started rising again...

Finally look at the timings of the rises, terraces didnt start rising until 2003 in boro, ie they hadnt recovered from the last crash.... accross the rest oof the country prices started to rise in 96/7, they were booming by 2001 and they had a massive spurt in 2003/early 2004, then the IR decissions stopped rises and caused mini crashes for 2 years.... As with the rest of the country, more desirable propties and bigger properties rose before the smaller less desirable property.

Boro seems a very different market to the rest of the UK, and even though the place is depressed, there could be ALOT more rises especially at the lower end. At the lower end the market looks like it is still excited, are people in a frenzy to buy? do people talk about property alot, oh its so expensive oh its risen to much? there is a massive gap between cheap and expensive property. the cheap property could get driven up alot further with money from the south? Where i live noone talks about property, young people know its too expensive its just not talked about anymore....

What does you friend expect from wage inflation? Personal wage inflation is really important question to ask yourself, knowing how much you will be on in 5 years is sooo important.. I wish i had done all the maths when i left uni five years ago...

[Northern Boy]

houses in boro have risen quickly, but they also crashed badly last time. However they are still cheap compared to the rest of the country, its a depressed area, ici and the decline of uk industry doesnt help. However compared to the rest of the country, and the rest of of southern and midland monkeys its still shockingly cheap. Even though wages up north are lower, you cant get lower than the minimum wage....

a couple min wage, 10k a year each and a 4k deposit, can borrow upto 76k, and get an ok place

a single guy with a 4k deposit on the min wage can borrow upto 47k, and get an ex council place

http://www.alliance-leicester.co.uk/mortga...dex.asp#summary

In middlesbrough a single person on the min wage can still buy a property on there own, something that is impossible everywhere else in the country. If somone on min wage can buy a property, it means it could go higher. In, places like brighton, london, somone on a high wage struggles to find anything, people on the min wage in the areas were left in the dust 8->10 years ago.....

property after the last crash was really really cheap, some areas have been cheap and some areas will always stay cheap...

@norther boy : most BTL are interest only, btlers are interested in the rent covering the morgage and a lil bit extra to take as profit. The little bit extra is taxed, the IO morgage on 150k is about 600 a mounth, but if they bought the place a few back they may have a lower deal. Even so a yeild of 5.5% ish there doing ALOT better than other BTLers. Boro still seems cheap compared to the rest of the uk, and the rent on your house, just about covers the morgage, again something that doesnt happen in most other places in the uk. Boro feels about 4-5 years behind the rest of the uk, dont forget prices could go higher and catch up....

boro :

http://www.home.co.uk/guides/house_prices_...rough&all=1

look at the price of terraces.

The housing market works on momentum, prices have continued to rise in boro over the past two years, in fact the price of a terrace has more than doubled in the past twp years! in most other parts of the country they have fallen, look and comparem to the graph of worcester:

http://www.home.co.uk/guides/house_prices_...ester&all=1

sold prices of terraces actually fell, and have only recently started rising again...

Finally look at the timings of the rises, terraces didnt start rising until 2003 in boro, ie they hadnt recovered from the last crash.... accross the rest oof the country prices started to rise in 96/7, they were booming by 2001 and they had a massive spurt in 2003/early 2004, then the IR decissions stopped rises and caused mini crashes for 2 years.... As with the rest of the country, more desirable propties and bigger properties rose before the smaller less desirable property.

Boro seems a very different market to the rest of the UK, and even though the place is depressed, there could be ALOT more rises especially at the lower end. At the lower end the market looks like it is still excited, are people in a frenzy to buy? do people talk about property alot, oh its so expensive oh its risen to much? there is a massive gap between cheap and expensive property. the cheap property could get driven up alot further with money from the south? Where i live noone talks about property, young people know its too expensive its just not talked about anymore....

What does you friend expect from wage inflation? Personal wage inflation is really important question to ask yourself, knowing how much you will be on in 5 years is sooo important.. I wish i had done all the maths when i left uni five years ago...

Not sure where your looking at, but 76k won't get you a nice place, an ex-council in an OK!!! place maybee. More like a £100k to be honest. As for £47k, the only ex-council you will get for that is in the worst of areas, a street full of smack heads if thats what you fancy!!

My landlord bought the property 4/5 months before I moved in, I was the first tenant, £6000 down the drain!!! Plus in that time, getting on for a year now the prices are still static.... and are starting to fall.

You refer to terraced houses doubling on the last two years, that's the amature BTL getting on baord before its too late... The streets are now lined with for sale or to let, either way they are going to loose out.

As for the rest of the properties, detached and flats etc. have all dropped. Detached have dropped 10% in the last year.

I really think your arguement is flawed!! Unless you live in the area and can see what is happening... Believe me as soon as "crash" appears in a paper, they'll all be breaking the EA's doors down to get rid of them quick...

[Tubtruck]

Not sure where your looking at, but 76k won't get you a nice place, an ex-council in an OK!!! place maybee. More like a £100k to be honest. As for £47k, the only ex-council you will get for that is in the worst of areas, a street full of smack heads if thats what you fancy!!

My landlord bought the property 4/5 months before I moved in, I was the first tenant, £6000 down the drain!!! Plus in that time, getting on for a year now the prices are still static.... and are starting to fall.

You refer to terraced houses doubling on the last two years, that's the amature BTL getting on baord before its too late... The streets are now lined with for sale or to let, either way they are going to loose out.

As for the rest of the properties, detached and flats etc. have all dropped. Detached have dropped 10% in the last year.

I really think your arguement is flawed!! Unless you live in the area and can see what is happening... Believe me as soon as "crash" appears in a paper, they'll all be breaking the EA's doors down to get rid of them quick...

Who are you trying to kid Northern boy?

I live in ingleby barwick, I dont know about your claims for the Persimmon flats i am not interested as I dont own one but what I do know is that the large 3 storey detached town houes with the double garages have increased in price quite significantly in the last six months, trust me I have spent time scanning both the estate agents (michael poole, robinsons, browns etc) as well as the builders, Barratt,Persimmon, Charles Church, Miller, Wimpey until they left. They did stagnate for quite some time at the glass ceiling of £250000 and the gap from what I paid and what my neighbours paid for smaller 4 bed detached houses shrunk by an awful lot, six months ago the gap between a smaller 4 bed detached with intergrated single garage and the largest with had shrunk from £60000 when I bought in 2004 to only £20000 by the summer of 2006. This was absolute madness as my house is more than 60% bigger. If you look at both the sold for and asking prices of both the estate agents and the builders you will see that this has now changed. The builders and estate agents are now asking (and yes getting ) £290000-£320000 for these larger types of houses the £250000 well and truly smashed. The smaller 4 bed detached had their increase a year or more ago and are tending to go for around £235000 and now it seems to be our turn getting the price back to a more sensible differential between the two. You commented about rental prices, and mentioned a figure of £550 for 3 bed semis, this seems about right, there was four came up for rent on my road just before Christmas, they are all now rented and all asked this price. Incidentally they were all priced at between £400 and £420 when they first rented back in 2004 so are stiffing the renters for a lot more money than ther mortgages have gone up by in this length of time. The thread also talks about the average wage in this area, it may be 18K but remember that the area is full of very large companies and their is a lot of workers earning a lot more money than this around here. I can tell you for a fact that there is two people living in my house and two in the houses at either side of me none have children and not one of them earns under double the 18K average, I cannot imagine that anyone else on my part of the estate is earning anywhere near as little as this either given that there is hardly a car on the drive worth less than 18K.

[Michael]

i was born in Stockton.....The whole Teesside area is economically depressed compared to rest of UK and has been so since the big 1982 recession when British Steel and ICI on which the area is so dependent laid of off tens of thousands of workers.......

Places like Leeds and Manchester have moved on but Teesside seems to be in a timewarp...You meet very few outsiders and foreigners but the people IMO are friendlier than anywhere else in UK....eg When you go into a petrol station the person behind the counter genuinely converses with you when elsewhere they seem to be monosyllabic saddoes..

[tahoma]

Ingleby toytown, as I understand it is known locally. My mate used to live in Yarm and then Maltby, so I've been through it a few times.

It looks like they planned it by getting a load of the little houses from Monopoly, shaking them up in a cup and throwing them into the bottom of a bucket. Viola, urban planning. Chuck about 3 little toy cars per house into the mix, and you have the parking situation.

I've never seen such a cluttered, soulless place to live.

[Guest grumpy-old-man]

Who are you trying to kid Northern boy?

I live in ingleby barwick, I dont know about your claims for the Persimmon flats i am not interested as I dont own one but what I do know is that the large 3 storey detached town houes with the double garages have increased in price quite significantly in the last six months, trust me I have spent time scanning both the estate agents (michael poole, robinsons, browns etc) as well as the builders, Barratt,Persimmon, Charles Church, Miller, Wimpey until they left. They did stagnate for quite some time at the glass ceiling of £250000 and the gap from what I paid and what my neighbours paid for smaller 4 bed detached houses shrunk by an awful lot, six months ago the gap between a smaller 4 bed detached with intergrated single garage and the largest with had shrunk from £60000 when I bought in 2004 to only £20000 by the summer of 2006. This was absolute madness as my house is more than 60% bigger. If you look at both the sold for and asking prices of both the estate agents and the builders you will see that this has now changed. The builders and estate agents are now asking (and yes getting ) £290000-£320000 for these larger types of houses the £250000 well and truly smashed. The smaller 4 bed detached had their increase a year or more ago and are tending to go for around £235000 and now it seems to be our turn getting the price back to a more sensible differential between the two. You commented about rental prices, and mentioned a figure of £550 for 3 bed semis, this seems about right, there was four came up for rent on my road just before Christmas, they are all now rented and all asked this price. Incidentally they were all priced at between £400 and £420 when they first rented back in 2004 so are stiffing the renters for a lot more money than ther mortgages have gone up by in this length of time. The thread also talks about the average wage in this area, it may be 18K but remember that the area is full of very large companies and their is a lot of workers earning a lot more money than this around here. I can tell you for a fact that there is two people living in my house and two in the houses at either side of me none have children and not one of them earns under double the 18K average, I cannot imagine that anyone else on my part of the estate is earning anywhere near as little as this either given that there is hardly a car on the drive worth less than 18K.

that sums up the Uk nicely doesn't it.

well it looks like we are all wrong then, people are obviously a lot better off than we imagined then, if they all have cars on their driveways worth more than 18k each.

I earn well above the average wage & for me to save up 18k cash would take me years.........oh well I suppose I could always get a loan to buy that 18k new shiny car couldn't I, then the neighbours will think I am very well off. I will probably buy the missus a convertible as well, this credit malarchy is ssoooooo cheap.

[Guest grumpy-old-man]

i was born in Stockton.....The whole Teesside area is economically depressed compared to rest of UK and has been so since the big 1982 recession when British Steel and ICI on which the area is so dependent laid of off tens of thousands of workers.......

Places like Leeds and Manchester have moved on but Teesside seems to be in a timewarp...You meet very few outsiders and foreigners but the people IMO are friendlier than anywhere else in UK....eg When you go into a petrol station the person behind the counter genuinely converses with you when elsewhere they seem to be monosyllabic saddoes..

spot-on with that post Michael. That's why we moved down to Wakefield in 2000, more work available from Leeds/York/Manchester etc.

I lived in Stockton for 30+years, there is nothing up there at all, but the people are really friendly.....that's normally a sign of a depressed area isn't it.

[tahoma]

I'll second that. It makes me laugh when people think of the North East as 'depressed' - it's a hell of a lot less depressing than much of the South.

A mate from Teeside went down to Margate on business, and his contact there said upon finding out where he was from, in all seriousness - 'Oh, you must love coming down here!'

Margate!!!

[English Rose]

Last time I was in 'boro the place was full of boarded-up houses, the population was falling and prices were rocketing. My taxi driver told me I should buy some of the boarded up houses and make a fortune - they're putting in a 24-hour drinking and gambling place and 'boros going to be 'just like Dubai'.

Do you think we could be in a bubble?

Rachel

[Northern Boy]

Who are you trying to kid Northern boy?

I live in ingleby barwick, I dont know about your claims for the Persimmon flats i am not interested as I dont own one but what I do know is that the large 3 storey detached town houes with the double garages have increased in price quite significantly in the last six months, trust me I have spent time scanning both the estate agents (michael poole, robinsons, browns etc) as well as the builders, Barratt,Persimmon, Charles Church, Miller, Wimpey until they left. They did stagnate for quite some time at the glass ceiling of £250000 and the gap from what I paid and what my neighbours paid for smaller 4 bed detached houses shrunk by an awful lot, six months ago the gap between a smaller 4 bed detached with intergrated single garage and the largest with had shrunk from £60000 when I bought in 2004 to only £20000 by the summer of 2006. This was absolute madness as my house is more than 60% bigger. If you look at both the sold for and asking prices of both the estate agents and the builders you will see that this has now changed. The builders and estate agents are now asking (and yes getting ) £290000-£320000 for these larger types of houses the £250000 well and truly smashed. The smaller 4 bed detached had their increase a year or more ago and are tending to go for around £235000 and now it seems to be our turn getting the price back to a more sensible differential between the two. You commented about rental prices, and mentioned a figure of £550 for 3 bed semis, this seems about right, there was four came up for rent on my road just before Christmas, they are all now rented and all asked this price. Incidentally they were all priced at between £400 and £420 when they first rented back in 2004 so are stiffing the renters for a lot more money than ther mortgages have gone up by in this length of time. The thread also talks about the average wage in this area, it may be 18K but remember that the area is full of very large companies and their is a lot of workers earning a lot more money than this around here. I can tell you for a fact that there is two people living in my house and two in the houses at either side of me none have children and not one of them earns under double the 18K average, I cannot imagine that anyone else on my part of the estate is earning anywhere near as little as this either given that there is hardly a car on the drive worth less than 18K.

Where do you get the increase in detached houses from, if your referring to new builds then fair enough but

http://www.home.co.uk/guides/house_prices_...&lastyear=1

clearly shows a 11% drop in value over the last year!!!! Semi's have gone +14%, but terraced have gone -25%. On average up 2%!!

Just take a look at rightmove, large detached houses in the area between £150k and £250k are struggling to sell!! In the last few weeks there has been £5k dropped of a number of the properties at the bottom end of the market. Me thinks the BTL are trying to get out, rental properties are just not shifting...

I very much doubt that estate agents are getting the £290 to £320k for these houses. The new three storey 4 bed semi's are only £210k and the floor space of these is unreal!!

Your road must be popular for rental but properties are still around from when I looked 6 months ago and my neighbour has theirs up for rent as they are moving and they've not had a single viewing!! A number of properties are still to rent for £425!!

Wages - So you both earn £36k, do you expect your other half to continue to work when you have kids?? I wouldn't, in my opinion this is one reason kids are going off the rails as parents simply don't realise the effort required raising children!!

How do you think the cars are paid for?? Debt MEW??

I can picture your situation, you have bought within the last 2 years hoping for large capital gains. Rates are increasing, prices are dropping, the properties are not shifting and as a result you are wondering whether you made the right move??????

However, you feel better to try and persuade others to buy rather than face up to the fact that negative equity is just around the corner!!

If your not worried then why be on here in the first place!!

At the end of the day, prices for 3 bed semi's have only dropped since I started renting 6 months ago!! So its certainly better to rent and save rather than buy. I may by if prices start to rice, but in reality I cannot see this happening.

You refer to good paid jobs, yes, there is a couple of large well paying companies but nowhere near enough to sustain this market.

PLUS.. corus looks likely to shut in the next couple of years (3000 employees) and the local council announce min. 100 job losses and factory in hartlepool shutting .... job losses galore in the area...

[Northern Boy]

A number of my friends has bought around the Middlesbrough and Stockton area over the last year or so.

One bought an ex-council property in a really bad area for £55k (up from about £17k 5 years ago!), another friend has bought a 1 bed!! flat for £95k (cashback and free mortgage for a year!!).

Another close friend is now considering buying a two bed semi for £120k!! I'm trying to convince him not to!!

I'm currently renting a three bed (new build) for £550 a month, the mortgage is around £850 over thirty years. So unless the landlord put down a big deposit they are loosing money each month, hoping for capital gains!!

The development has has a couple of houses for sale for the last six months, at £155k, even if they dropped the price to £150k and managed a sale they wouldn't have made a penny!!

Considering the average salary for the area is around £18k I don't believe prices can go any higher. I've been watching properties for the last year and none have gone up in price, they are dropping by £3/5k because they are taking so long to sell.

Rent remain static, I know that atleast 6 of the houses (of which there is 30 on this development) are BTL. Three of which are up for rent at the mo for £595!! We got ours for £550 as the landlord had waited 4 months for a tenant. The world of BTL is truely insane!! I believe it is only this that has kept the market at such levels.

Now the sentiment is changing with interest rates rising I assume that BTL will falter and prices will come down. To add to this, they have been building two bed apartments, selling for £125k (5% deposit paid and all that), now they are strugging to sell them they have dropped to £115, some people have lost £10k in a year. So much for its better to buy than rent?!?

There are 24 apartments due to be completed in the next month or so and only 7 have sold, no more BTL t prop then up...

Anyway, getting to the point, I did some maths to try and convince my friend, the results are as follows...

He buys and I rent, I pay the difference into savings and in 5 years time he has paid of around 8% of his mortgage. So I have saved around £20k and he has £28k in equity. This is assuming prices rise by 2% pa in line with inflation (which I doubt considering no rise in the last year!!). If prices were to drop 5% then the difference between his equity and my savings is zero!! Hence, I think it better to hold out and see where the market goes.

Even better, assume prices stagnate (rent and house prices), again I save the difference and he buys. After 5 years he has around £12k equity, again I have £20k savings. I then take out a 25 year mortgage (he would have taken out 20) with a 20k deposit. Assuming the same rates apply in 5 years then in total I would have paid £265k for the property and he would hae paid £315k!! £50k difference because I waited and rented for 5 years. THIS IS WHAT I AM HOPING FOR AND THINK IT IS MORE THAN LIKELY!!

Even better, prices stagnate and drop 5/10/20% in the next 5 year!! You don't have to be a genius to work it out. People don't realise that mortgages are front end loaded with interest an that they pay very little of the capital at the start. They assume I've paid in £10k, so I've knocked £5k of the capital, this just isn't the case.

THE OTHER SIDE OF THE ARGUEMENT IS:

Prices rise with inflation (2%!!!!!??) and don't drop - you would have been better buying.

Prices rise at a much higher rate than inflation (10%!!!!) - you would have been better buying.

IMHO neither of these will happen, especially in the North East, where the top of the market has been reached and passed due to BTL. Plus all the MEW and rising interest rates will push people over the edge.

We simply don't have the supply and demand problem of the South, if we did their wouldn't be houses and apartments up for rent and sale for six months+..

Please feel free to add to this or try and pull my arguement/ figures apart..

Northern Boy

CAN ANYONE ACTUALLY FAULT MY FIGURES - Or is it true, it all "depends"? Houses stagnate and yes you are better to wait, rent and save a larger deposit?????????????????????????????????????