LightEnds Posted October 31, 2008 Share Posted October 31, 2008 There seems to be a trend emerging: housing associations and councils snapping up large swathes of new build developments at massive discounts. I'll start: Aberdeen - Citigate - 2 bet flats were £250+, bought in bulk by a housing association for around £150k per unit. Quote Link to comment Share on other sites More sharing options...
jonb Posted October 31, 2008 Share Posted October 31, 2008 There seems to be a trend emerging: housing associations and councils snapping up large swathes of new build developments at massive discounts. I'll start:Aberdeen - Citigate - 2 bet flats were £250+, bought in bulk by a housing association for around £150k per unit. Rent on a 2 bed flat is about £700/month, so at £150k, that's a gross yield of 5.6%. They will be paying about 7.5% for the loan to finance it, so it doesn't sound like a massive discount to me. Quote Link to comment Share on other sites More sharing options...
LightEnds Posted November 1, 2008 Author Share Posted November 1, 2008 Rent on a 2 bed flat is about £700/month, so at £150k, that's a gross yield of 5.6%. They will be paying about 7.5% for the loan to finance it, so it doesn't sound like a massive discount to me. Fair point - the intrinsic value of these new build flats is probably only around £100k. You would think that councils and housing associations are in it for the long term, so perhaps they see things slightly differently. Whether or not they've paid over the odds, they are still helping to clear the market and lower the expectations of other sellers in the market who still think that £200k+ for a new build is a reasonable price. Quote Link to comment Share on other sites More sharing options...
EdiLass Posted November 2, 2008 Share Posted November 2, 2008 Rent on a 2 bed flat is about £700/month, so at £150k, that's a gross yield of 5.6%. They will be paying about 7.5% for the loan to finance it, so it doesn't sound like a massive discount to me. I'm wondering why you say 7.5% on the loan? Quote Link to comment Share on other sites More sharing options...
Alba Posted November 2, 2008 Share Posted November 2, 2008 There seems to be a trend emerging: housing associations and councils snapping up large swathes of new build developments at massive discounts. I'll start:Aberdeen - Citigate - 2 bet flats were £250+, bought in bulk by a housing association for around £150k per unit. Please post your evidence for this. Don't want a thread based on hearsay. Quote Link to comment Share on other sites More sharing options...
LightEnds Posted November 2, 2008 Author Share Posted November 2, 2008 Please post your evidence for this.Don't want a thread based on hearsay. No hard evidence as yet. However I've heard this from two separate sources - one of which is here: http://www.housepricecrash.co.uk/forum/ind...t&p=1430172 Two quick anecdotes while I'm on - firstly, a source that I trust has told me this afternoon that a local housing association has just bought the last dozen or so flats from a local town centre development - Citigait, by Barratt. They were being punted off to gullible fools for around £250k for a two bed flat right by the railway line and half a mile from the 'Torry Hilton' a.k.a. the local jail. Quote Link to comment Share on other sites More sharing options...
Alba Posted November 2, 2008 Share Posted November 2, 2008 No hard evidence as yet. However I've heard this from two separate sources - one of which is here:http://www.housepricecrash.co.uk/forum/ind...t&p=1430172 "a source that I trust has told me" .......... as I said hearsay.......unless evidence provided. Quote Link to comment Share on other sites More sharing options...
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