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othello

What's Happening In Bath?

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For those who have never been there, Bath is an attractive spa town. It is very affluent with lots of ex-Londoners which have helped push up prices. I lived there a few years ago and we go there shopping sometimes.

Yesterday we walked from Royal Crescent to the City Centre. There were so many shops/galleries closed down and up for sale or to let. More interestingly we noticed many, many flats that were obviously empty. They are conversions in Georgian terraces and very much sought after. I wondered if they are for sale or just being held on to as an investment. There was not one for sale board on display but I thought that perhaps (typical of Bat Council) they are not allowed. I did see one up but it was inside a swindow.

Thern I got home and looked on the internet. There are 294 flats for sale in Bath (source: Rightmove), ranging from £149,000 for a studio flat to £2 million. There are also 127 price drops on Propertysnake (which as we know does not include properties on Rightmove).

Anyone like to hazard a guess as to what is going on?

PS I saw ione house 4 bed 'ideal as a BTL opportunity' curreently let out till next July with a rental income (fromn students) of £20,000 per annum. The house was on for £340,000. Call me a bear but the sums don't add up. On a £300k mortgage the interest alone at current rates would be around £21,000. :unsure:

Edited by othello

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The local building society have been ramping BTL like shit recently.

With not much economic diversity (even less than last time around) then the fallout could be even worse this time around. Big employers have been leaving and replaced by students/non doms/investors and speculators and quite a few London refugees. A lot of the families and local residents have effctively moved out.

If it becomes too expensive for tourist traffic then you will be seeing many more empty shops, the rents/rates are insane.

The title is an understatement to say the least.

Buy-for-uni mortgage "pretty risky"

http://www.londonstockexchange.com/en-gb/p...icleID=18312740

Edited by OnlyMe

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There was not one for sale board on display but I thought that perhaps (typical of Bat Council) they are not allowed. I did see one up but it was inside a swindow.

A swindow? If it was a BTL that might be quite close to the truth. [i'm not usually one to pounce on other people's typos, but I do like the idea of The Bat Council as well - good name for a band.]

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...

Thern I got home and looked on the internet. There are 294 flats for sale in Bath (source: Rightmove), ranging from £149,000 for a studio flat to £2 million. There are also 127 price drops on Propertysnake (which as we know does not include properties on Rightmove).

Anyone like to hazard a guess as to what is going on?

Screenshot_Yahoo__Finance_UK___House_Price_Centre___Market_Analysis___Mozilla_Firefox.png

What ain't going on is much flat price inflation...

post-9755-1192391360_thumb.png

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interesting. I didn't realise Yahoo did all that too.

Not sure if there has been a thread on yahoo's data.

I had a look at cities beginning with a B recently (Bristol, Bournemouth, Birmingham, Brighton..) all had basically the same trend for flats: 5-10% rise around 2003 then flat ever since (except Brighton, which shows a sustained growth in flat prices). Either Yahoo data are dubious, or there hasn't been a boom in flat prices.

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Screenshot_Yahoo__Finance_UK___House_Price_Centre___Market_Analysis___Mozilla_Firefox.png

What ain't going on is much flat price inflation...

I think these graphs are too sensitive to random fluctutations to be meaningful. I've just looked at a variety areas.

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You should have seen Bath in the last recession. The number of closed down shops was incredible. One small shopping mall, which was converted into a Littlewoods (?) just emptied of tenants in the space of a few months. Total ghost town.

The small shopping mall was made into a BHS but it is still open. It works as a BHS, it never worked as a small collection of shops (they didn't get any "high street names" on board).

At the far end of the shopping centre, near the train station, there is a £360M building project underway:

Southgate Development

It is still an incredibly busy shopping centre on Saturdays and Sundays.

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You should have seen Bath in the last recession. The number of closed down shops was incredible. One small shopping mall, which was converted into a Littlewoods (?) just emptied of tenants in the space of a few months. Total ghost town.

Hi! I was at Bath University from 88 - 92 and I can concur with your observations. Bath has some nice bits but (like Cheltenham) is mostly skanky, chavvy and rough. I witnessed many a blood-spattered pavement Sunday mornings and a few mates were kicked in coming out of Bog Island nite-club.

It's reverting to type - fur coat / no knickers.

The bit down by the bus station is the worst and there are many estates. OK it's not Bradford but it's no Shangrila either.

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...

Yesterday we walked from Royal Crescent to the City Centre. There were so many shops/galleries closed down and up for sale or to let.

...

I think this has more to do with excessive business rates. In addition, I believe that the council owns a lot of the City centre property and likes to get a return.

With regard to residential property, I haven't noticed any falling prices or oversupply headlines. Although I'm hoping to see some by Christmas!

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Not sure if there has been a thread on yahoo's data.

I had a look at cities beginning with a B recently (Bristol, Bournemouth, Birmingham, Brighton..) all had basically the same trend for flats: 5-10% rise around 2003 then flat ever since (except Brighton, which shows a sustained growth in flat prices). Either Yahoo data are dubious, or there hasn't been a boom in flat prices.

You're wrong about Bristol. Old-build and conversion flat prices (a sizeable proportion of the market) went up about 20-30% between early 2004 and early 2007, rising fastest in the cheaper areas. I can't think of any area where flat prices have been completely flat since 2004 - even the newbuilds have increased by at least 10%.

I suspect that the Yahoo data are dubious and are based purely on newbuild data which have been skewed by ever decreasing room sizes.

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You're wrong about Bristol. Old-build and conversion flat prices (a sizeable proportion of the market) went up about 20-30% between early 2004 and early 2007, rising fastest in the cheaper areas. I can't think of any area where flat prices have been completely flat since 2004 - even the newbuilds have increased by at least 10%.

I suspect that the Yahoo data are dubious and are based purely on newbuild data which have been skewed by ever decreasing room sizes.

Some anecdotals from Bristol:

A friend of mine has his flat on the market - is it a lovely conversion of a Georgian property in central Bristol but in a quiet street - it has been on the market for a month - one viewing and no offers

Another bought into a new development in Eastville about two years ago - not a very salubrious area tho not the worst either - he says the building is full of drug dealers and is worse than a council high rise - he has had it on the market for three months with no interest in it whatsoever

Third friend - bought a terraced house in St George - as an investment - spent a year doing it up and have had some viewings but no offers despite dropping the price by £10k. I noticed there are seven properties for sale on the same street of around 40 properties.

All of them are reluctant to drop their price, and have blamed poor marketing by the EA, bad timing and other reasons.

At the same time every possible spare patch of land is being used to build flats. The back of my place of work is surrounded by industrial units, wasteland and dodgy housing estates - but the building development of "flats" (rabbit hutches) goes on apace.

Any thoughts?

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I saw one house 4 bed 'ideal as a BTL opportunity' curreently let out till next July with a rental income (fromn students) of £20,000 per annum. The house was on for £340,000. Call me a bear but the sums don't add up. On a £300k mortgage the interest alone at current rates would be around £21,000. :unsure:

Student maintenance loans range between £3000 and £4500 aprox. So getting £20,000 off four students a year sounds rather optimistic unless they're all from really well off families. Students also cause a lot of wear and tear!

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You should have seen Bath in the last recession. The number of closed down shops was incredible. One small shopping mall, which was converted into a Littlewoods (?) just emptied of tenants in the space of a few months. Total ghost town.

There seem to be a lot of 'bohemian' shops on the edge of Bath city centre, selling antiques, furniture, nik-naks etc. that can never pay their way.

Rents are sky high, with one beds starting at around £700pcm, although there is quite a plentiful stock of HMOs. Although they look nice to the tourists, a lot of the Georgian housing that I have viewed is in quite a poor state of repair, and low ceilings can be an issue.

BTW - The grotty bus station is now gone, to make way for a some kind of supposedly mock Georgian shopping area / bus station.

http://www.southgatebath.com/gallery/

I'm sure the 93 apartments they are planning will be snapped long up before the scaffolding is down.

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I've recently moved to Bath (at the suggestion of friends who already live here) and, while I am happy with the deal I found (£800/month for a 2-bed on the very outskirts, in a lovely location) I was absolutely gob-smacked at some of the places on offer.... Lots of places had rentals in the range £2K to £3K per month... which *has to be* insane!

Bath is very pretty - at least it is in the city centre - and, as long as you stay well clear of the dodgy areas, remains a desirable city, on the whole... but, as I've discovered since moving here, the run down areas are very run down. While Bath is a city, and has considerable tourist attraction in the centre, it seems to have little other industry or commerce - everyone I know who lives in Bath (and has a job that can pay rent) commutes to Bristol or Swindon to work.

House purchase prices are insane too... even a basic 3 bed semi in a non-spectacular location costs £300K - and a 2-bed flat with a 'desirable address' (and many, many addresses are considered desirable) go for the same. This, to me, seems like London prices - but, in contrast to London, typical income is no-where-near the same levels. Since moving here (I used to shop in Bath fairly frequently a few years ago) I've also noticed that trade seems to have wound down... not many places offering not a lot of stuff - and I know their costs to stay in business are stratospheric... I do wonder how they remain open... I can't imagine there being a good business case for remaining open.

Conversely, I've no clear view if this is happening everywhere... it certainly feels as if we're entering a recession...

Back in the early '90s, I was told that the first thing to indicate a recession is to look for the number of new cars of the latest registration... When times are good there will be many higher-specified new cars as a proportion parked outside offices... whereas, in a recession, there will be fewer, typically smaller lower-specification cars (i.e. cars bought privately at knock down prices rather than "incentive cars" bought by a successful company to motivate a workforce.) My anecdotal experience of 07 plates around here fits this pattern... I've seen no ~£20K cars with 07 places - and just a handful of <£10K ones.... if we ignore the £150K Aston Martins etc. bought by people for whom car purchase doesn't require budgeting. If the sales figures for 07 plate cars are good, I can only conclude that they're being sold to people who don't drive them around this city. :-S

Edited by A.steve

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Talking of cars, there are some amazing deals on chop-ins, for instance 3 year-old (approx £12.5K new) car, swap for new of exact same spec/range - total cost £5000, just over £1500 a year for depreciation and warrantied motoring on a £12.5K car is cheap. Suggests dealers cutting their margins to the bone to keep forecourt sales up.

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Talking of cars, there are some amazing deals on chop-ins, for instance 3 year-old (approx £12.5K new) car, swap for new of exact same spec/range - total cost £5000, just over £1500 a year for depreciation and warrantied motoring on a £12.5K car is cheap. Suggests dealers cutting their margins to the bone to keep forecourt sales up.

I've heard similar from various sources - one of whom pointed out that his "brand new" sports car had an 2006 registration not because it was second hand, but because it had sat on the forecourt that long... and as it was new, he welcomed the substantial discount. :-)

I've also been made aware of a part-ex deal which seems far too good to be true... taking a 4-year old MR2 and neglegable cash in part-ex for a almost-new RAV4.

One explanation might be that as cars today are more reliable than cars of years gone by, people are inclined to replace less frequently - but, to be honest, I don't believe this is the reason.

It would be very interesting to get hold of historic car finance data - to see if the car-on-credit market has already dried up...

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Some anecdotals from Bristol:

A friend of mine has his flat on the market - is it a lovely conversion of a Georgian property in central Bristol but in a quiet street - it has been on the market for a month - one viewing and no offers

Another bought into a new development in Eastville about two years ago - not a very salubrious area tho not the worst either - he says the building is full of drug dealers and is worse than a council high rise - he has had it on the market for three months with no interest in it whatsoever

Third friend - bought a terraced house in St George - as an investment - spent a year doing it up and have had some viewings but no offers despite dropping the price by £10k. I noticed there are seven properties for sale on the same street of around 40 properties.

All of them are reluctant to drop their price, and have blamed poor marketing by the EA, bad timing and other reasons.

At the same time every possible spare patch of land is being used to build flats. The back of my place of work is surrounded by industrial units, wasteland and dodgy housing estates - but the building development of "flats" (rabbit hutches) goes on apace.

Any thoughts?

I wouldn't touch Eastville or St George with a bargepole - for reasons which you describe (as a female living alone). A friend of mine lost in a 4-way bidding war for a 2-bed house in St George in '04. It went to sealed bids. Those days are long gone. A case of easy come, easy go with the equity gains.

The market did a swift about turn around April/May time, IMO. The biggest price falls so far for flats seem to be in Clifton/Redland/Cotham where the rental yields are lowest. Down 4% in 6 months according to Hometrack.

I didn't get my flat on the market until late May - I wanted to get it on sooner but couldn't manage it due to health/energy problems (most of which are much better now thanks to an alternative practitioner!).

In late June I accepted an offer on my conversion flat about 34% higher than the price I paid for it in 2004, just 1K below the asking price. Unfortunately the sale fell through. My fault mostly. After a survey was done some damp problems emerged which put my buyer off even though I offered to lower the sale price accordingly (plus it seems she was sneakily viewing other properties during the 5 weeks I took mine off the market - she was a boomer downsizer). I've now paid to have these problems sorted out, but I should have had a damp survey done before I put the flat on the market (it doesn't cost anything).

Your anecdotals confirm my observations that it's clearly a buyer's market now. A high proportion - perhaps 30% - of properties seem come back on the market a month or two after a sale is agreed. I suspect that this is a combination of mortgage refusals and FTBs/BTLers getting cold feet.

I was getting at least 5 viewings a week in May, June and August. My flat was off the market for most of September for damproofing work. Last week I had just one viewer. He's decided to go for a 2-bed house instead of a flat, now that his parents have coughed up a bigger deposit for him!

Now I believe I'd be lucky to achieve a sale price 6% lower than the one I had agreed in late June. I've lowered my asking price a little, and if I don't get at least 2 viewings this week I'll lower the asking price again next week, against the 'better judgement' of my EA who seems very resistant to lowering the asking price.

Asking prices are all over the place. I've seen a 20% difference in asking prices for identical flats built within the past few years. It doesn't take a genius to work out which flat is new to the market and which one hasn't sold after 6 months.

A friend of mine had to lower her asking price 3 times over a 6 month period before she got a sale that went through to exchange (she's completing next week). She had 2 sales fall through due to mortgage refusals. That was for a flat in Redland.

My 1-bed flat and garden are lovely (in spite of my avatar and username) - I shouldn't complain, and my mortgage income multiple is now below 3x, but I'm trying to keep up the momentum to sell, because it's not the right location for me, and probably not in the right country, and I'm now convinced that a crash is underway. My bunny would miss my walled garden though. :(

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An anecdotal from a Bath Estate Agent today (while I was viewing a property)

- They are seeing turnover 40% down on last year

- They have a record number of properties on the books

- 25% of those sellers have marked price reductions in the last few months.

I was actually tempted to remind the EA he's supposed to be lying to me about what a good time it is to buy!

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