Negative Equity Stalks Buyers!

[Sinking Feeling]

http://www.dailymail.co.uk/pages/dmstandar...in_page_id=1804

We gambled on our house - and won

Beautician Amy Hayward and boyfriend Michael Shorter believe they got on the property ladder just in time.

Amy says had they not taken a gamble in February 2006, when they borrowed 105% of the asking price of their one-bedroom, end of terrace house in Kidlington, Oxfordshire, they would have missed their chance to become homeowners at all.

'We talked about it a lot,' says Amy, 23. 'Ideally, we would have loved to have had a deposit. We thought of borrowing from our parents, but then we thought, ''Let's see if we can do it ourselves''.'

Amy and Michael, 28, a mechanic, took out a Coventry Building Society deal where a mortgage of 95% of the property's value was coupled with a personal loan, taking the total borrowed to five per cent more than the house price.

'My mum was very cautious - she wanted to know if we were absolutely sure,' Amy says. 'We were. Of course, we would have been devastated if the market had fallen.'

As it happens, she says, similar houses are now going for about 15% more than they paid 17 months ago - sums they could not afford to pay today, and as a result they are no longer in negative equity.

That's right love, a one year gain on a 25-30 year mortgage means you are out of danger - you have won!

Edited June 24, 2007 by Sinking Feeling

[the end is a bit nigher]

it's good to see that they realised they gambled - and as long as they remember most gamblers lose and are happy to face the consequences, then good on them

[DrBob]

I can't imagine anything more foolhardy! Borrowing 125% of the value of a property? To pay for prior overspend on credit cards?

It's no surprise that there will be borrowers willing to take up these deals, but I'm astonished that lenders are participating. I presume the lenders have calculated their liabilities and decided this is worthwhile(?). This whole scenario looks like a recipe for disaster (and a wave of 'mis-selling' claims).

[PotNoodle]

As it happens, she says, similar houses are now going for about 15% more than they paid 17 months ago - sums they could not afford to pay today, and as a result they are no longer in negative equity.

===================================================================================================

Er, no.

These are asking prices, love.

Over-optimistic, over valued "test the market" prices.

Check the LR figures and Snake.

OX postcodes are dropping.

Your house is worth about the same as you paid for it almost

eighteen months ago.....

if you can get a sale in amongst the HIP-avoiding crowd.

And once the BTL brigade flood the market with one bedroom flats...

This is simply tragic.

[Prof]

Yes, Amy, haven`t you done well ?

Please could you give us an update on your situation in a year or two. I would be interested to see how things are going. You had better hope that the economy doesn`t take a downturn, as not only will it affect the value of your home, but I would have thought that if finances get tight, your customers won`t be bothered if their skin isn`t.

A bit early to assume that your gamble has payed off.

[IDN]

she sounds like a simpleton

[sikejsudjek]

she sounds like a simpleton

Shes just another victim of boom and bust economics, provided by the debt money system. As interest rates rise she will be a slave to the banks. If (when prices) crash she will be in negative equity as well. Another serf for the system.

[Jimmy2Times]

she sounds like a simpleton

Its the DailyMail, wouldn't really expect them to interview Steven Hawkins now would we.

[southsea13]

Kidlington is a real dump (near Oxford). If she`s buying the terrace house that I`m thinking of then I hope it`s got good anti-chav measures in place.

[It is different this time]

Amy says had they not taken a gamble in February 2006, when they borrowed 105% of the asking price of their one-bedroom, end of terrace house in Kidlington, Oxfordshire, they would have missed their chance to become homeowners at all.

'We talked about it a lot,' says Amy, 23. 'Ideally, we would have loved to have had a deposit. We thought of borrowing from our parents, but then we thought, ''Let's see if we can do it ourselves''.'

So they borrowed 105% of asking price and she thinks they have done it theirself! Hellooo you have not saved 30% to put down to 'make it yourself' you have just borrowed more than you can afford and even more than the property value. Sky is the limit when it comes to stupidity

Ignorance can be cured, but stupidity cannot

[jonpo]

Shes just another victim of boom and bust economics, provided by the debt money system. As interest rates rise she will be a slave to the banks. If (when prices) crash she will be in negative equity as well. Another serf for the system.

errm money is a commodity its price is set by the market. you do understand that dont you?

of course money is 'special' its priced in terms of itself.

Edited June 24, 2007 by jonpo

[maffo in oxford]

Kidlington is a real dump (near Oxford).

Yeah, that's why Richard Branson lives there

Btw I know the girl, i'll ask her about things in 2 years time!

Edited June 24, 2007 by maffo in oxford

[dog]

I can't work out who is more stupid, the lenders or the borrowers. Don't borrowers understand that prices can go down as well as up? Don't lenders realise that they are adding petrol to the pyre of subprime lending?

[FrozenOut]

Only one word is needed here:-

Idiot.

[Realistbear]

http://www.dailymail.co.uk/pages/dmstandar...in_page_id=1804

That's right love, a one year gain on a 25-30 year mortgage means you are out of danger - you have won!

If they haven't sold the value of their house is a matter of opinion whereas the debt is real (Merv Horatio King 2006).

[Guest X-QUORK]

Yeah, that's why Richard Branson lives there

Btw I know the girl, i'll ask her about things in 2 years time!

Have always considered Kidlington to be a bland suburban dump myself. Does Richard Branson live in a semi or a huge mansion well outside of Kidlington itself?

[Ash4781]

How do people plan to pay off these massive debts (in low wage inflation environment) ?

Edited June 24, 2007 by Ash4781

[maffo in oxford]

Have always considered Kidlington to be a bland suburban dump myself. Does Richard Branson live in a semi or a huge mansion well outside of Kidlington itself?

You could say that about certain parts of Oxford. I distinctly remember you saying how much you liked Jericho when you stayed in Oxford.

Does "Castle Mills" ring any bells?! . Life on mars, the TV series, could have been filmed there!.

It's like anywhere, you have good parts and bad parts. Church street/Mill street/ in Kidlington for example are rather nice. Mr Branson himself, lives down Mill End, close to the river Cherwell.

Edited June 24, 2007 by maffo in oxford

[@contradevian]

If they haven't sold the value of their house is a matter of opinion whereas the debt is real (Merv Horatio King 2006).

It would seem that the value of the securitized mortgage loans is a matter of opinion too, if the collapse of hedge funds in the US is anything to go by. And the reason why banks and building societies in the UK are taking on customers and debts like this, is because its mostly off balance sheet, and the finance people are able to shuffle the risk around the City with their "sliced and diced" CDO's.

I think we are going "where no man has gone before."

[Guest X-QUORK]

You could say that about certain parts of Oxford. I distinctly remember you saying how much you liked Jericho when you stayed in Oxford.

Does "Castle Mills" ring any bells?! . Life on mars, the TV series, could have been filmed there!.

It's like anywhere, you have good parts and bad parts. Church street/Mill street/ in Kidlington for example are rather nice. Mr Branson himself, lives down Mill End, close to the river Cherwell.

Fair enough Maffo, I can only really comment on what I see from the main drag running through to Oxford from Banbury. I'd agree with you that Oxford has a fair few rough areas too, although it's still my favourite city.

[maffo in oxford]

Fair enough Maffo, I can only really comment on what I see from the main drag running through to Oxford from Banbury. I'd agree with you that Oxford has a fair few rough areas too, although it's still my favourite city.

Fair comment on the main drag! 9although it's not that bad

The couple in question are nice enough, I just think like many people, they don't know that they may have been better off renting.

For the interest payments on a typical 1 bed house/mortgage in Kidlington, you could rent a reasonable 3 bed house, and bank the remander!.

Edited June 24, 2007 by maffo in oxford

[OLDFTB]

This story does not make sense. I have done a bit of detective work and here, for what it's worth, is my take on it:

They say they took a gamble in Feb 2006.

The only Terraced house sold in Axtell Close nearest that date sold for £170,500

Check out this place for sale on rightmove:

http://www.rightmove.co.uk/viewdetails-493...=1&tr_t=buy

Same street, same type of property as the photo in the Mail shows them posing in front of their property.

Yet the rightmove asking price is.......£165,000!!!!

So, maybe, just maybe ,they might be in even more negative equity.

Stupid is as stupid does folks!

[OzzMosiz]

GOOD JOB INTEREST RATES AREN'T GOING UP!!!

OLDFTB - good investigative work!

Edited June 24, 2007 by OzzMosiz

[Sinking Feeling]

This story does not make sense. I have done a bit of detective work and here, for what it's worth, is my take on it:

They say they took a gamble in Feb 2006.

The only Terraced house sold in Axtell Close nearest that date sold for £170,500

Check out this place for sale on rightmove:

http://www.rightmove.co.uk/viewdetails-493...=1&tr_t=buy

Same street, same type of property as the photo in the Mail shows them posing in front of their property.

Yet the rightmove asking price is.......£165,000!!!!

So, maybe, just maybe ,they might be in even more negative equity.

Stupid is as stupid does folks!

Maybe she mean that they'd increased their negative equity to 15%!

[maffo in oxford]

Are you so sure it's Axtel close where their home is located?. Going by that very small picture, it could be in the grovelands estate.

Which is Ex council & slightly cheaper than Axtel close (which is part of the orchard estate, which has been all privately owned homes since it was built).

I haven't been to Kidlington for a while, I will find out exactly what area they live in.

I'm intrigued, as Kidlington prices have gone through the roof, any downturn will put some peoples noses out of joint unfortunately

Edited June 24, 2007 by maffo in oxford