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Mr. Gruff

Aberdeen, Aspc Stats

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Been chatting with some friends recently about houses/flats.

We are all currently in modest 2-bed tenements - a few in luxury executive apartments (you know the type)

Few friends are getting married, having kids and all that jazz.

So - the topic of moving up the ladder (or pyramid) comes up.

The big fear is that prices will drop - and I tried as hard as I could to explain that falling prices makes trading up easier.

However, they still hoped for rising prices.

These are numerate, intelligent, rational people (at least until house prices come up).

After a little digging - I find out that those hoping to trade up:

Bought in 2005/6 - say for £100k with say £90k mortgage - house now "worth" £175k and (IO off course) mortgage is say £90k = £85k equity. i.e. about 50% LTV.

A few have MEWed and a few have lost heavily in stocks and shares. But most have all that equity

Anyway - the plan is to trade up from £175k to say £300k for a 3-bed house with garden - that's an extra £75-£125k mortgage

So they plan to use the £90k equity to buy the new house which will give them a LTV of say 30%.

What they fear and what I told them, was that their £175k flat might only sell for 80% of that (£140k) which cuts their equity to about £50k.

Well, they worry that their £50k is not enough to get them a mortgage on the property they want.

most can get mortgages of around £200k it seems + 50K deposit = £250k which does not get them what they want (looking at current prices)

Anyway - they are all hoping that prices remain high, so that they can use their equity to double their losses.

If prices fell back to 2006 levels - they'd be stuck where they are. Assuming of course you can't get a Liar Loan.

I think it goes to show that Cash is King and that in the last few years, they've been to so many lovely places in holidays that I can't justify to myself. The difference is that now I have a War Chest to buy if I so wanted and they have only got Paper Profits.

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Been chatting with some friends recently about houses/flats.

We are all currently in modest 2-bed tenements - a few in luxury executive apartments (you know the type)

Few friends are getting married, having kids and all that jazz.

So - the topic of moving up the ladder (or pyramid) comes up.

The big fear is that prices will drop - and I tried as hard as I could to explain that falling prices makes trading up easier.

However, they still hoped for rising prices.

These are numerate, intelligent, rational people (at least until house prices come up).

After a little digging - I find out that those hoping to trade up:

Bought in 2005/6 - say for £100k with say £90k mortgage - house now "worth" £175k and (IO off course) mortgage is say £90k = £85k equity. i.e. about 50% LTV.

A few have MEWed and a few have lost heavily in stocks and shares. But most have all that equity

Anyway - the plan is to trade up from £175k to say £300k for a 3-bed house with garden - that's an extra £75-£125k mortgage

So they plan to use the £90k equity to buy the new house which will give them a LTV of say 30%.

What they fear and what I told them, was that their £175k flat might only sell for 80% of that (£140k) which cuts their equity to about £50k.

Well, they worry that their £50k is not enough to get them a mortgage on the property they want.

most can get mortgages of around £200k it seems + 50K deposit = £250k which does not get them what they want (looking at current prices)

Anyway - they are all hoping that prices remain high, so that they can use their equity to double their losses.

If prices fell back to 2006 levels - they'd be stuck where they are. Assuming of course you can't get a Liar Loan.

I think it goes to show that Cash is King and that in the last few years, they've been to so many lovely places in holidays that I can't justify to myself. The difference is that now I have a War Chest to buy if I so wanted and they have only got Paper Profits.

So are you assuming that prices will only fall to 80% in the value of their properties, and not on the properties that they want to trade up to?

A similar fall in prices will mean that their £300K aspired to property, will only cost them £240K, which they will then be able to afford. Surely this is in line with your statement " I tried as hard as I could to explain that falling prices makes trading up easier".

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I need some advice regarding our current situation. My girlfriend and I both own our own flats outright. I rent mine out while we both live in hers. At the moment we have no debt other than my student loan and a few grand on a credit card. We would both like to buy a house, settle down and start a family but the current state of affairs with the economy scares the cr@p out of me. Should we sell both places and try to buy a decent 3 bedroom with a small mortgage or sell one, keep the (less expensive) one and continue to rent it out but take out a larger mortgage. Or should we both just stay put and wait for the economic storm to pass by?

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So are you assuming that prices will only fall to 80% in the value of their properties, and not on the properties that they want to trade up to?

A similar fall in prices will mean that their £300K aspired to property, will only cost them £240K, which they will then be able to afford. Surely this is in line with your statement " I tried as hard as I could to explain that falling prices makes trading up easier".

I tried to explain that - 80% of £300k = £240.

However, what they are focused on (as well as today's prices) is how much they need for a deposit.

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I need some advice regarding our current situation. My girlfriend and I both own our own flats outright. I rent mine out while we both live in hers. At the moment we have no debt other than my student loan and a few grand on a credit card. We would both like to buy a house, settle down and start a family but the current state of affairs with the economy scares the cr@p out of me. Should we sell both places and try to buy a decent 3 bedroom with a small mortgage or sell one, keep the (less expensive) one and continue to rent it out but take out a larger mortgage. Or should we both just stay put and wait for the economic storm to pass by?

For me - I would look at getting the 3-bed house - although selling 2 flats to buy a new house is a complicated task.

Since she's your girlfriend and not your wife - you need to plan what happens if you decide to split?

One solution would be sell your flat once the current lease ends,

then in a few months, after looking around - sell your girlfriend's flat and buy the 3-bed.

One thing you need to think about it is if you get a job abroad - is that likely to happen?

Luckily you have low levels of debt.

If you drive - you might be suprised at what you can get a bit further from the city.

I hope this helps a little. :)

Good luck

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I need some advice regarding our current situation. My girlfriend and I both own our own flats outright. I rent mine out while we both live in hers. At the moment we have no debt other than my student loan and a few grand on a credit card. We would both like to buy a house, settle down and start a family but the current state of affairs with the economy scares the cr@p out of me. Should we sell both places and try to buy a decent 3 bedroom with a small mortgage or sell one, keep the (less expensive) one and continue to rent it out but take out a larger mortgage. Or should we both just stay put and wait for the economic storm to pass by?

Why does the economy scare the cr@p out of you? Are you insecure in your job and in your line of work? If so then you should certainly think carefully about your plans. However, the 'experts' predict 5 to 10 years of austerity, so are you prepared to postpone settling down and starting a family until the 'good times' hopefully return again?

If you are in an occupation that is in demand and a job that is secure, then don't let the gloom and doom blight your life.

There is a 4th option which is to sell both properties and buy a more modest property without a mortgage, but a property that permits you start a family with a view to trading up when times are more secure. If you buy a property that can have value added by improvements then this would assist with trading up in the future.

If you are prepared to live in a rural area or the suburbs then you could consider finding a plot of land and having a home built as a 5th option. You can sell one of your flats to fund the land purchase and an early stage of the building. If you have a formal agreement with a bank or building society they will release funds at each stage in the project. You can live in the second flat through the building phase then sell it to pay off the bank or building society loan. With your current asset/financial situation you should be able to get a better mortgage rate. There are two year fixes at 2.99% which would give you sufficient time to have your house built. You could then be in a home that suits your longer term requirements and be mortgage free,

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For me - I would look at getting the 3-bed house - although selling 2 flats to buy a new house is a complicated task.

Since she's your girlfriend and not your wife - you need to plan what happens if you decide to split?

One solution would be sell your flat once the current lease ends,

then in a few months, after looking around - sell your girlfriend's flat and buy the 3-bed.

One thing you need to think about it is if you get a job abroad - is that likely to happen?

Luckily you have low levels of debt.

If you drive - you might be suprised at what you can get a bit further from the city.

I hope this helps a little. :)

Good luck

Working abroad is not likely at the moment but I have family in Canada and a few of my friends have moved there recently so it's always a possibility. We have worked out a plan if we split up but we would be looking to tie the knot once we get a house sorted. I have just seen two very nice properties in Drumoak but we are still decorating one of the flats so I'm trying not look until we know how much we can afford. Many thanks for the advice.

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Why does the economy scare the cr@p out of you? Are you insecure in your job and in your line of work? If so then you should certainly think carefully about your plans. However, the 'experts' predict 5 to 10 years of austerity, so are you prepared to postpone settling down and starting a family until the 'good times' hopefully return again?

If you are in an occupation that is in demand and a job that is secure, then don't let the gloom and doom blight your life.

There is a 4th option which is to sell both properties and buy a more modest property without a mortgage, but a property that permits you start a family with a view to trading up when times are more secure. If you buy a property that can have value added by improvements then this would assist with trading up in the future.

If you are prepared to live in a rural area or the suburbs then you could consider finding a plot of land and having a home built as a 5th option. You can sell one of your flats to fund the land purchase and an early stage of the building. If you have a formal agreement with a bank or building society they will release funds at each stage in the project. You can live in the second flat through the building phase then sell it to pay off the bank or building society loan. With your current asset/financial situation you should be able to get a better mortgage rate. There are two year fixes at 2.99% which would give you sufficient time to have your house built. You could then be in a home that suits your longer term requirements and be mortgage free,

I have never really thought about getting a house built for us, that would be a fairly daunting undertaking but probably worth it for a unique home. I'll speak to my father's friend who's an architect to see what the costs might be.

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I think that building a house for yourself sounds like a good idea - but it could turn out to be a nightmare.

I don't do my own dentistry, I don't make my own clothes and I don't grow my own food.

That show Grand Designs shows a pair of well-off baby-boomers taking years off their life due to the stress of project managing a building project when they have no experience of doing this.

You might guess that this is not specific advice - more general.

However, if you did your sums and homework - building a house in and around Aberdeen could be a very attractive prospect.

Given that a house will probably cost you £2,000-£3000 per square meter to buy - I can imagine that you can design your own house for much less.

Consider it as an option - but don't get romantically involved in "creating a forever home" and thinking about "stamping your individuality" on a house. Be prepared to lose all your hair and go massively over budget. :blink:

But at least you can say that it "wasn't about the money - it was about the quality of living blah blah blah"

------

On a slightly more serious note - I've been looking at houses that are about 100m2 with say 3 beds + non-galley kitchens - some even have this mysterious space called a "dining room"

Anyway - there seems to be a huge variation in prices depending on the building type.

Here are two examples - both in the same neigbourhood - down by the river (I'd like to go jogging in the morning and have picnics when it's sunny etc...)

This one:

Semi-detached house

102 m2 - on for price over £320,000 valued at £300,000

Price per square meter at price over = £3137 and at valuation = £2941

This one:

Ground Floor flat

75m2 - on for a price over £180,000 valued at £180,000

Price per square meter is = £2,400

Cost at £3000 per m2 would be £225,000 = £45,000 extra!

What you are paying an extra £45,000 for?

A front and back garden - only 1 neighbour (semi-detached) and a bit more (slightly dated looking) space.

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I would like to live on Riverside drive, despite the traffic the location is real nice. Have you thought about Leggart Avenue across the bridge? Much cheaper but you are effectively in Kincorth.

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I would like to live on Riverside drive, despite the traffic the location is real nice. Have you thought about Leggart Avenue across the bridge? Much cheaper but you are effectively in Kincorth.

I've got a flat in town.

I don't expect to be in Aberdeen in 3 years time.

I couldn't be bothered moving to be honest - and the prospect of paying rents in Aberdeen doesn't please me! :blink:

A lot of this ASPC stuff is hypothetical - but if I saw something that was suitable (size, location, price) I'd pounce on it! :ph34r:

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After a number of serviced flats and much looking finally took the plunge as my contract in Aberdeen has been extended, Menzies Road, two bed flat, overs over 80, valuation report said 80 but my offer of 70 (cash purchase) was accepted last week. Slightly smaller, better deco flat upstairs was sold in december, offers over 98 on a 98 valuation sold for 95 and is now being advertised for 695 a month......

It may well be that vendor expectations are becoming more realistic.

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After a number of serviced flats and much looking finally took the plunge as my contract in Aberdeen has been extended, Menzies Road, two bed flat, overs over 80, valuation report said 80 but my offer of 70 (cash purchase) was accepted last week. Slightly smaller, better deco flat upstairs was sold in december, offers over 98 on a 98 valuation sold for 95 and is now being advertised for 695 a month......

It may well be that vendor expectations are becoming more realistic.

An interesting "first" post moody frog ;)

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Needed somewhere cheap...........as I have my home elsewhere, not interested in schools etc, its in the cul de sac end of Menzies road, reasonably quiet, ok condition. Better value than the travel lodge or 100 a night serviced studio flats given I'll be in town for at least another year.

Solicitors advice was that the valuations are meaningless given the low volumes, that big houses, 400k plus where sticking but that nice granite flats were still selling but with more reasonable expectations. He also confirmed tht that offers wont be accepted without finance being in place and that unless you have a 25% deposit its very difficult to get approval nevermind a resonable rate.

First post, yes first post, been reading the site for a while, never had a "useful" contribution to add with respect to ASPC before now.

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Moody-if your flat "done up" can fetch £695 pcm then this is a very good yield indeed (over 10%). I knew aberdeen rents were strong given the transience of a good portion of the working populus, but not that strong!

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I dont believe the flat upstairs will rent for 695 a month, but it is being advertised at that at the moment.

Torry two beds are typically in the order of 600-630 a month max, they are bound to get market resistance to nearly 700 a month.

Aberdeen rental yields for flats I understand are in the order of 6 %, if I ever rented out the flat I've bought, not planning to but you never know, the gross yield based on 10/12 rental would be just over 8% which I'd be more than happy with given that it virtally costs me money to save, if you get my drift.

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I would suggest that the rise in prices is directly related to the improving local jobs market.

There has been a marked increase in oil related activity over the last few months, I'm an engineer, oilcareers were typically sending me a list of 5 or 6 broadly suitable jobs a day, now its in the teens and often over 20. I understand from various collegues that its the same across the patch and that many of the North Sea oil opcos have a backlog of work which is getting/now has budget approval.

The glory days of 06/07 are still some way off but the rate squeeze is defo over.......well heres hopeing anyway !

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I would suggest that the rise in prices is directly related to the improving local jobs market.

There has been a marked increase in oil related activity over the last few months, I'm an engineer, oilcareers were typically sending me a list of 5 or 6 broadly suitable jobs a day, now its in the teens and often over 20. I understand from various collegues that its the same across the patch and that many of the North Sea oil opcos have a backlog of work which is getting/now has budget approval.

The glory days of 06/07 are still some way off but the rate squeeze is defo over.......well heres hopeing anyway !

22K in 3 months.

I'm thinking statistical noise.

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well congrats on getting a place but torry is not a place id be buying.

I've become a little less prejusticed against Torry - it's not such a bad place.

And the prices are much more realistic compared to other places.

If you want a nice area - go to Union Glen - but you'll be paying for it.

If you like the smell of fish, the dump and Polish girls - then Torry is the place to be!

You should note however, that there was an interesting report that was published by the property guy from the University of Aberdeen. He noted that some areas hold their value (Queen's Cross was one) while others have had price surges and crashes on a much more severe basis (Torry was one).

Anyone know where to find this report? I'm sure I didn't make it up, I just can't remember where it is. :)

I should note that I was looking at a house in Torry recently - needed redecoration but for about 120m2 - 3 bed and proper sized rooms - it cost about half of something similar on the other side of the river. Close to shops and good to get to Alten's (those bridges just piss me off! ;) )

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  • 395 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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