Wimbledon Btl Disaster (in The Making)

[bubble_court]

I tried to post this on the main forum but never appeared...

Hi all,

I am new here and decide to write because I saw this recently.

I live in Wimbledon, which I consider to be a very nice area, where I have been happily renting for the past 5 years. I, as everybody, have seen prices rise to the stratosphere in the past years (although they are clearly falling now). Now, if you know Wimbledon, in the Broadway there is a new development, built by Durkan, due to finish by summer 2009, named Chorus.

Chorus, SW19

It consists of about 60 (mostly 1 and 2 beds) 'luxury' flats, priced at (don't fall off our chairs):

from £345K for 1 bed

from £450K for 2 bed

Advertised as 'great investment' (yeah right!)

Oh, before I forget, parking is extra £25K (no, this is not a joke!),

Service Charge approx £1,250

Ground Rent 1 bed £300, 2 bed £350, 3 bed £400

You can rent decent 1 beds for 1-1.1K and decent beds for 1.2-1.4K in the area, so do the math!

It gets better: its on the busiest road (Broadway, and about 50 yards from the local Walkabout)

(Friday and Sat nights on the main street are quite a spectacular mess!)

Now, just to show the madness (scam) I have found after some search on the net, an investment document, from a SA company ramping up the place,

because many SA people live in Wimbledon.

The math they use are just unbelievable!!!

I cannot post the whole document here due to size restrictions,

The link to this disaster:Oh my God

But for 1 bed:

Even after allowing for rent of £1150, which I think is too optimistic, judging from rents in the area and taking into consideration the fact that there will be sthing like 35 1 beds dumped altogether in the market, and for 5.29% interest only (hah!) they come cash flow negative!

However, they allow (sic) for 6% annual appreciation, which miraculously turns it into a nice earner...

Not to mention, the unbelievable extra fees (brokers, sourcing, etc)

here is the laughable summary

WIMBLEDON 1 BED

SUMMARY

Unit Number 25 -------------------- Solicitors Fees + VAT £1,500.00 ---- Maintenance £600.00 ----------- Return on Investment (£) 15.80%

Purchase Price £335,000.00 -------- Stamp Duty Band 3.00% ----------- Yield 4.12% ----------------------- Depriciation on Rand 10.00%

Reservation Deposit £2,000.00 ------ Brokers Fees 1.00% ----------------- Monthly Balance -£42.42 ------- Return on Investment ® 17.56%

Sourcing Fees (+ VAT) 1.50% --------- Disbursements £1,000.00 ------------- Yearly Growth 6.00% -----------

Deposit Amount (on exchange) 10% -- Rental Estimate £1,150.00 ---------- Monthly Additional Income £1,675.00

LTV 70.00% ------------------------------ Interest Rate 5.29% ------------------- Total (Monthly) £1,632.58

Total deposit 30.00% ------------------- Letting Agent Fee 8.00% ---------------Total (Yearly) £19,590.95

Exchange Rate (£:R) R 14.00 ----------- Ground Rent £200.00 ----------------- Total (Yearly in Rand) R 274,273.30

Apparently more than 50% are sold... oh dear...

I believe 1 beds should be more like £150K (parking included) and 2 beds more like £250K (parking also included)

What do you people think?

[Bubble_Bobble]

I'm quite shocked, that's not even the posh end of Wimbledon is it?

I don't know the area too well, but have a mate in Colliers Wood.

Did that used to be a row of shops that all got demolished?

How much do 1-bed flats go for around Wimbledon Village?

Maybe they mean 50% of one of them has been sold??????

[Basildon Bond]

I quite like this bit:

Developers will frequently withdraw a deal if the timetable is not

adhered to. If the delay is down to the investor not taking quick action,

and the deal is withdrawn, the financial consequences for the investor are

severe. They lose the reservation fee, IPS finders fee and in all probability

legal fees and mortgage arrangement fees.

We must emphasise that there is never a problem with investors who

respond promptly, but please don’t take up a deal under the misconception

that you can make your own timetable!

Yeah right - like there will be people queuing up to take on these turkeys if an invester is a bit slow. THese people still don't get it. They are still the using the language of the bubble on the way up. It is the buyer that has all the power now and these kinds of conditions will just scare people away.

[TeddyBear]

yup, you're right, ridiculous prices, hence trying to sell them abroad I suppose where they hope that people don't realise that these flats are on a busy road, in a falling market, are rabbit hutches etc. etc.

South Africans often seem to pop up on TV programmes here about people who have lost serious money on property. Perhaps the news hasn't reached home yet?

Having said all that, this part of Wimbledon did seriously bubble the past few years. Two bed terraces around the corner from this jumped in price about double from 2002 - 2008. A friend's 2 bed terrace went for about 550K!!! Having been 280K at the end of 2001. Yet some other friends of mine there couldn't sell because their house was an unusual construction and they've given up and rented it out.

Edited November 11, 2008 by TeddyBear

[nicebuyer]

Those flats are going to be on the market for some time. that specific area is horrid at night, you can get a nice 1-2 bed flat for £250k in the 'slopes' area right now or for £350k easily a place on the Ridgeway. Obviously the developer priced it before the project started and didn't take into account the HPC. There's a similar issue up on Cottenham Park Road, a few flats, 2 bed, £500k or so. But then flats in Wimbledon have gone through the roof. Last year a friend sold a one bed flat for £550k. Even now there are some places on the market at incredible prices.

Take this one, http://www.rightmove.co.uk/viewdetails-20985812.rsp

£600k for a two bed flat on Worple Road? The noisiest road in Wimbledon? Someone's having a laugh

Or this two bed, halfway up the hill for £650k http://www.rightmove.co.uk/viewdetails-16641805.rsp

Granted, Oxford House is nice but £800k+ for a 2 bed flat? http://www.rightmove.co.uk/viewdetails-23209514.rsp

The OP talked about prices dropping but they have a long way to go.

[bubble_court]

I'm quite shocked, that's not even the posh end of Wimbledon is it?

I don't know the area too well, but have a mate in Colliers Wood.

Did that used to be a row of shops that all got demolished?

How much do 1-bed flats go for around Wimbledon Village?

Maybe they mean 50% of one of them has been sold??????

Yes, it's not even the posh end, this is down in the town, the posh part is in the village.

There are not many 1 beds up in the Village, but it is a very special case up there.

This one is on the hill road for 285K asking: 1bed up on the Hill.

A person I know bought in the town very near the station beg. of 2007 a 1 bed for almost £300k !! We are talking for 450 sq.f. (41sq.m).

That's madness I thought then, but those were the going prices.

Yes, that was a row of shops that got demolished.

I also thought they must be joking re the 50% sold, however I recently mailed Savills and I was sent a document with the current units available,

which shows that the SA document is correct about the reserved ones (see attachment). The surprising thing is that even now (Nov 2008) prices have not dropped a bit ie they are asking for the same as of summer 2007!!!

My only explanation is that if the deposit they were asking and got is true (the 30%) we are talking about £100K which is a lot of money to forego...

I don't know what else to think, maybe that's why they keep building it, otherwise I expected this to get mothballed!

Sure enough, these should not shift for more that £175K for the 1 beds (current stamp duty threshold).

Chorus_Price_List_November_2008.pdf

Chorus_Price_List_November_2008.pdf

[bubble_court]

yup, you're right, ridiculous prices, hence trying to sell them abroad I suppose where they hope that people don't realise that these flats are on a busy road, in a falling market, are rabbit hutches etc. etc.

South Africans often seem to pop up on TV programmes here about people who have lost serious money on property. Perhaps the news hasn't reached home yet?

Having said all that, this part of Wimbledon did seriously bubble the past few years. Two bed terraces around the corner from this jumped in price about double from 2002 - 2008. A friend's 2 bed terrace went for about 550K!!! Having been 280K at the end of 2001. Yet some other friends of mine there couldn't sell because their house was an unusual construction and they've given up and rented it out.

yes indeed they have.

Now things are coming down to earth:

2 bed terrace for £425k (Still grossly overpriced) Palmerston Road

2 bed terrace for £330k (some sanity returning!) Russell Road

[bubble_court]

Another disaster (equivalent to that of Thamesmead in the east of London) is at Plough Lane:

Plough Lane

yes, that is £275K for a Barratt shoebox (452 sqft). The 'development' (seems more like a 'backtracker' to me) consists of almost 400 flats!

If you pass by it already looks and feels like a ghost town... very few inhabitants..

I don't think many have been sold actually... if any of you has any info

And there are loads of other new developments around... oh dear.

No more than £85K for one of those me thinks, that is around -70% off

[iguana]

2 bed terrace for £330k (some sanity returning!) Russell Road

That's a flat, the property is just the 1st floor and attic.

Where I live a 2 bed terrace, with a 3rd bed in the extended attic, sold for £721k last November. In the South Park Gardens area, just off the Broadway. They are now being marketed from between £555 - 675k. The two beds rent for around £1200pm, so still vastly overpriced.

Edited November 14, 2008 by iguana

[we the sheeple]

Another disaster (equivalent to that of Thamesmead in the east of London) is at Plough Lane:

Plough Lane

yes, that is £275K for a Barratt shoebox (452 sqft). The 'development' (seems more like a 'backtracker' to me) consists of almost 400 flats!

If you pass by it already looks and feels like a ghost town... very few inhabitants..

I don't think many have been sold actually... if any of you has any info

And there are loads of other new developments around... oh dear.

No more than £85K for one of those me thinks, that is around -70% off

bordered by lovely electricity sub-station and pylons.

zzzzzzzzzzzzzzzzzzzzzzzzzzzzz

(long term, not a problem. st george's hospital only 10 mins walk away)

[bumblebeeandboy]

Another disaster (equivalent to that of Thamesmead in the east of London) is at Plough Lane:

Plough Lane

yes, that is £275K for a Barratt shoebox (452 sqft). The 'development' (seems more like a 'backtracker' to me) consists of almost 400 flats!

If you pass by it already looks and feels like a ghost town... very few inhabitants..

I don't think many have been sold actually... if any of you has any info

And there are loads of other new developments around... oh dear.

No more than £85K for one of those me thinks, that is around -70% off

My inlaws live opposite this awful place so i know it very well. I've never seen plough lane look so clear of traffic as that picture. Very few flats seem to be occupied (surprise surprise). Told inlaws to move before they started building but they wouldn't. They were worried about the social housing tenants causing a problem and now they're really worried it's about to turn into a council estate. I've got not nothing against council estates having grown up on one in Raynes Park but council tenants don't seem to be the same these days.

[bubble_court]

Update Update!.

Just been emailed new prices for the launch

They are about 15-18% lower than the ones quoted in November 2008.

Still, I think they ned to drop another 40% to spark some interested.

440K (instead of 540K) for a 2 bed of 75 sq.m in a block is a bit too high

Oh, and lets not forget:

...

A non refundable reservation fee of £1,500 is required to reserve a unit

Service Charge approx £1,250

Ground Rent 1 bed £300, 2 bed £350, 3 bed £400

Units marked with an asterisks* will be offered parking at an extra £25,000

"Flat no." "Floor" "Beds" "outside space" "sq.m." "sq.f.""Price (march 2009)" "Price (November 2008)"

5 "2nd" "2 bed" "corner balcony" 91.3 983 £450,000.00 £550,000.00

10 "2nd" "2 bed" "balcony" 74.8 805 £440,000.00 £540,000.00

17 "3rd" "2 bed" "balcony" 81 872 £450,000.00 £550,000.00

22 "3rd" "1 bed" "no outside" 55.8 601 £295,000.00 £365,000.00

23 "4th" "1 bed" "balcony" 58.3 628 £310,000.00 £380,000.00

25 "4th" "1 bed" "balcony" 48 520 £285,000.00 £345,000.00

29 "4th" "1 bed" "balcony" 51.9 559 £290,000.00 £360,000.00

37 "5th" "1 bed" "balcony" 48.2 519 £290,000.00 £350,000.00

47 "6th" "1 bed" "balcony" 47.3 509 £300,000.00 £365,000.00

58 "7th" "3 bed" "extended balcony" 93.4 1005 £550,000.00 £675,000.00

59 "7th" "2 bed" "balcony/terrace" 79.9 860 £500,000.00 £580,000.00

[Te Mata]

Jesus!

I'm in a 85sqm flat in a nice block on the Parkside. A little bit of a walk to the Village (or a ride on the 93), but nice and quiet and straight across the road, and overlooking The Common. Two bedders in this complex are ~ 300k or less. The one I'm in sold for 305k 15 months ago.

Those new build prices are ludicrous.

I'd happily buy here when the price is right.

BTW, what's with all the Boks in Wimbledon?

[TeddyBear]

the web link has the cheek to call it an investment opportunity! 2% rental yields and doubtless no capital appreciation. Great opportunity, where can I sign up?

[iguana]

BTW, what's with all the Boks in Wimbledon?

I've read that initially SAs came to Wimbledon because it was one of the whitest areas of London, which I think it still could be. Now it's so popular with Saffers that it's become a home from home. Immigrants do tend to prefer living in areas with high concentrations of their countryfellows. So Wimbledon is to (white) South Africans what New Malden is to Koreans.