B B C Panorama 04.02.08

[europbaron]

Or you could look at it this way

sold for £150,000 - £86400(Rent for 9 years till 2013 @ 800 a month) means that you are left with £63600 which is £33900 less than 97,500

You could, but it would be a prime example of financial ignorance. For example, what happened to mortgage payments, insurance and general upkeep, and savings interest in your calculation?

[It is different this time]

"I suppose technically Im in negative equity, but once prices pick up later in the year, I'll be ok" - she really thinks her flat will go up by £140,000 [ie 70%] in less than 10 months

Can she please confirm what she means by 'once prices pick up later in the year'? more likely 'once prices pick up later in the century'

but my PVR didn't record this program (despite recording Eastenders, the program before)

Bin it and buy yourself a Humax! one of the best gadgets I have ever bought

[Bearfacts]

Great programme - well done FP.

What troubles me is that we now know that many properties have fallen by upto 60%, different areas and different property types - how come the indices until very recently were still showing prices going up ? It seems highly unlikely that only certain types of properties have fallen so massively or even only certain areas.

[CharlieChuck]

Or you could look at it this way

sold for £150,000 - £86400(Rent for 9 years till 2013 @ 800 a month) means that you are left with £63600 which is £33900 less than 97,500

What about interest on the capital? that should pretty much cover the rent.

To be honest I was thinking of the house value, rather than living expenses, whether it be paying a mortgage or rent.

[nmarks]

don't you feel sorry these people

I mean

1 they worked so hard to save the money for the deposit NOT

2 they were so dilligent at making sure the price the paid was correctly recorded NOT

3 they worked so hard to find tenants NOT

4 they worked hard to do the research to show if the numbers added up

5 they worked so hard to look after their tenants

6 they have the nerve to call themselves entrepreneurs

HAHAHAHAHAHAHA

not I am bitter but I am having to move from berkshire where the prices have been stupid for ever to worcestershire which in comparison is too cheap to believe the sooner these wannabe "entrepreneurs" learn to work for a living and not sponge off their tenants the better

Couldn't agree more. BTL is not enterprise - it's just denying others a home of their own.

Inventing things and creating employment to put them into profitable production - that's what I call enterprise.

Edited February 5, 2008 by nmarks

[Doom Lord]

You could, but it would be a prime example of financial ignorance. For example, what happened to mortgage payments, insurance and general upkeep, and savings interest in your calculation?

I disagree The origional poster didn't state how much they sold their property for in 2004. Seeing as at the time we were having a little bit of a down turn and how much HPI we have had since in the last few years I would guess that it was a a fair bit less than £150,000. As a result of this I think I am giving a resonable ball park figure. You see I was trying put forward an opposing figure\view based on as little information as the origional poster was prepared to give.

For what its worth I think you should only STR when HPI is 4% or below all things considered.

[Killer Bunny]

For what its worth I think you should only STR when HPI is 4% or below all things considered.

'Fraid you don't get it matey. By then it is FAR too late. To sell, now - as in your suggestion (4%), you have to reduce by 20% v prevailing prices.

[CharlieChuck]

Just as an example I str in 2004 for 120,000. house next door to it sold last year for 150,000. Currently I'm down (although I wouldn't like my chances of selling it now). A 35% reduction on 150,000 is 52,500. So, based on these figures price in 2013 could be 97,500.

Doomlord, I sold in 2004 for 120,000. (the clue is in the first line of my post ).

I do sort of understand where you're coming from, it depends how much was owed on a mortgage at the time, how much comparable rents are. etc. The more equity you have at the time of the STR the better off you will be. I only need a 20% drop to be level, the interest on my STR fund has covered my rent.

[Doom Lord]

'Fraid you don't get it matey. By then it is FAR too late. To sell, now - as in your suggestion (4%), you have to reduce by 20% v prevailing prices.

So are you saying that every single house on the market in the UK today will have to reduce their prices by 20% to sell? I dont think so!! Although I am suggesting that NOW is the time to sell.

But lets go with your way of thinking I brought my house in 2004 £205,000 valued last week at £300,000. I put it on the market at a 20% reduced rate for a quick sale and I get the sale then I still make around £40K Tax free from 2004 prices, yes I have paid my mortagage but that was less than rent in my area so to STR in 2004 would have been a mistake wouldn't you say?

If I reduce the amount by 10% from current value for a quick sale then I make 70K which I think is more realistic than 20% reduction.

So dont tell me I dont get it because I do and I know that taking profits to early is just as bad as leaving it to late.

[this_prisoner_is_opting_out]

In 1994 when I was 20 years old and working full-time at Tesco I wanted to buy my first flat. There were some new builds going up in Thamesmead for 22k, which although was just within my Tesco-wage budget, I thought was overpriced for Thamesmead.

340k?

[Doom Lord]

Doomlord, I sold in 2004 for 120,000. (the clue is in the first line of my post ).

I do sort of understand where you're coming from, it depends how much was owed on a mortgage at the time, how much comparable rents are. etc. The more equity you have at the time of the STR the better off you will be. I only need a 20% drop to be level, the interest on my STR fund has covered my rent.

Sorry skimmed over that for some reason, still that means your already £30,000 down compared to selling last year which was pretty close to my estimate.

Considering the interest in your fund is paying your rent outright would suggest that most of the £120,000 was in equity not a mortgage which means your mortgage would have been very small so taking into account inflation eroding your savings over the 9 year period because you are living of the interest you could say these even each other out. That means you need a nominal fall to around the £90,000 to start making profit on your STR, that was the whole point of STR-ing?. Risky Business and that why I rekon HPI has to be 4% or less to make it Profitable.

[europbaron]

So are you saying that every single house on the market in the UK today will have to reduce their prices by 20% to sell? I dont think so!! Although I am suggesting that NOW is the time to sell.

But lets go with your way of thinking I brought my house in 2004 £205,000 valued last week at £300,000. I put it on the market at a 20% reduced rate for a quick sale and I get the sale then I still make around £40K Tax free from 2004 prices, yes I have paid my mortagage but that was less than rent in my area so to STR in 2004 would have been a mistake wouldn't you say?

If I reduce the amount by 10% from current value for a quick sale then I make 70K which I think is more realistic than 20% reduction.

So dont tell me I dont get it because I do and I know that taking profits to early is just as bad as leaving it to late.

It all depends on personal circumstances, but I would have to say that your area has seen exceptional HPI to have gone up 50% since 2004. Are houses actually selling at these elevated prices? I sold in Jan 2005 in a decent part of Withington, Manchester. Since then only 8 comparable houses have sold in the area. Of these 3 sold for more (the biggest increase 18% more in Jun 06), 4 sold for less (biggest fall 8% in Sep 05) and the most recent sale (4 months ago) was for the same sum as I sold for. My former next door neighbour sold for >5% LESS in Mar 2006. I possibly could have got slightly more for the house by waiting, but personal circumstances forced the move (it was not an intentional STR), and I remain happy that I have done as well as I could have hoped for, had I bought the house as an investment in the first place.

[CharlieChuck]

I should point out here my rent is lower than my mortgage was due to me living with my partner now, compared to buying a one bedroomed home. I had about 50% equity.

Although the interest has covered my rent, my STR fund has increased because the wages I would have used to pay the mortgage I instead save each month.

Obviously I would have been better off selling in June last year, but I saw 2 of my friends lose everything due to the nineties crash, and I was convinced prices were going to crash in 2004.

[Doom Lord]

It all depends on personal circumstances, but I would have to say that your area has seen exceptional HPI to have gone up 50% since 2004. Are houses actually selling at these elevated prices? I sold in Jan 2005 in a decent part of Withington, Manchester. Since then only 8 comparable houses have sold in the area. Of these 3 sold for more (the biggest increase 18% more in Jun 06), 4 sold for less (biggest fall 8% in Sep 05) and the most recent sale (4 months ago) was for the same sum as I sold for. My former next door neighbour sold for >5% LESS in Mar 2006. I possibly could have got slightly more for the house by waiting, but personal circumstances forced the move (it was not an intentional STR), and I remain happy that I have done as well as I could have hoped for, had I bought the house as an investment in the first place.

They have been, but we all know here on this site that they are going down and I am well prepared for to reduce the price as FP has sugessted. It was only ever brought as a hedge against either HPI or a HPC due to the state it was in and the fact I had to move from a flat to a house. Anway it will be on the market next week so I will soon find out

The trouble with this site is that we know this is going to happen and it's as almost as if it already has but to the genral public this is still breaking news will it, wont it, no it couldn't, could it? The game is not over for them yet but a lot of people here forget that and make choices that cost them real money imo.

[Killer Bunny]

If I reduce the amount by 10% from current value for a quick sale then I make 70K which I think is more realistic than 20% reduction.

You'd be lucky.

[Doom Lord]

You'd be lucky.

Well I am going to put my money where my mouth is on this one and will keep you posted.

[thecrashingisles]

This thread's had over 28,000 views in a day. Is that an HPC record?

[Alistair Campbell]

This thread's had over 28,000 views in a day. Is that an HPC record?

It will not get many more as some tit has moved it to a sub forum.

[Killer Bunny]

It will not get many more as some tit has moved it to a sub forum.

That would be me then, as it has served its purpose. It is a Media thread.

[tigsrenting]

Well done FP, I mean Panorama, not the other comment.

[pig]

Certainly I am - yes!! Every single corner is riddled with fraud and dishonesty -- from end to end -- from top to bottom. The EAs. the "Mortgage Lenders", the surveyors, the CML [iN PARTICULAR], the press - certainly up and until 3 months ago! -- the tv channels - peddling advertising posing as "programmes" - paid for by lisence payers...... the list is endless.....

Holy crap I think there is actually way more to this story, I think the story of the Nana woman first appeared in a magazine called Regenerate back in JANUARY 2007 !!!!

I actually made a topic of it back in February.

Apologies but I don't know how to link to other topics - but its easy to find - it was my first post. Here is the link to the article anyway.

Living the Dream

It is a fascinating article about how Btl was/is ruining the fabric of society, well worth reading. But the probable link to the Panorama programme has suddenly given it a whole new spin !

Her name in this article is 'Nona Amoatemaa-Appiah' a TV presenter - got to be the same one ?!

Back then mortgage fraud was being investigated and properties had plunged in value by £30000 !!!:

Barratt has reported to the local police allegations that many of its flats were bought by fraudulent investors, using fake IDs to raise mortgages. The fraudsters have then pocketed the cash from often unwitting tenants. As they have not paid a penny to their lenders, many of the flats have already been repossessed and the tenants evicted...The neighbourhood's increasingly poor reputations combined with the mounting tide of repossessions has resulted in the value of flats plummeting, creating a rare pocket of negative equity in south-east England -Thames Walk's residents reported that the value of their properties has fallen by up to £30,000

How long has this pot pourri of Mortgage fraud been known about (nb back the, as noted above it was actually a different sort of fraud being investigated) ? How has Panorama come across this story and what more is there to tell ?

And it must be said that Nona or Nana must be putting a very brave face on it - prices were falling drastically even then, when the rest of the market was booming.

What a mess !!!

[Timm]

Does anyone have a link to watch this programme again? It is no longer on the BBC player.

It is available on youtube, but is a bit disjointed.

Thanks!

[Killer Bunny]

Does anyone have a link to watch this programme again? It is no longer on the BBC player.

It is available on youtube, but is a bit disjointed.

Thanks!

See it in our website, below.

[Disillusioned]

Well I am going to put my money where my mouth is on this one and will keep you posted.

How's your sale going, Doom Lord? Does it have it's own thread?