Sunday, January 27, 2008

Shameless property ramping

How to be a FTB: Case studies

Elaine Shanks, 25: She has bought a luxury2-bed flat for £245,000. "I've bought off-plan, so I only had to put down the deposit." Louisa Smith, 28: "I knew I just couldn't afford to buy, but my parents suggested I went for part-ownership and they helped me with a deposit of £50,000," she says. She was paying about £400 in rent per month, with bills on top, but is now paying about £800 in mortgage and rent. For this she gets a 50% stake in a £250,000 1-bed flat. Camilla and Lucy Thornton: "Our grandfather left us each a small legacy which would not have been enough for a deposit for one of us. But by combining them it was enough." Their flat cost £325,000. "We will be living on baked beans for a while - no going out for us!"

Posted by little professor @ 04:52 PM (2053 views)
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23 thoughts on “Shameless property ramping

  • little professor says:

    And lastly:

    Friends since childhood, Jonathan Lowerson and Ewan Williams, both 25, have bought a three-bedroom house at £351,000. They will rent out one bedroom and have an interest-only mortgage. “We are banking on the fact that house prices will rise,” says Jonathan. “It is ironic that we have waited so long to do it and now we are, people are talking of a crash.” They, too, couldn’t have raised the deposit without help from Ewan’s parents.

    _________

    Ironic is not the right word.

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  • F kin morons!

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  • who stole my pension? says:

    the only thing rising is interest rates, taxes and inflation!!!

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  • “living on baked beans and not going out for a while” – sums it all up nicely

    These people are clearly in a state of congnitive dissonance. This government has hoodwinked people into thinking they are better off through house prices, and most people are falling for it.

    Fools.

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  • Tiggerthetiger says:

    I do feel for these people.Big business has shaft ed them.

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  • japanese uncle says:

    Moronic is the word.

    Incidentally, their friendship from childhood seems destined to end in a bitter manner.

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  • The amounts forked out above are simply staggering considering their age, the transient nature of their jobs and their lack of any financial sense. They have simply turned themselves into financial slaves to huge mortgages in a falling market on the very kind of properties that may be the worst hit and to top it all off the biggest borrowers have interest only mortgages because “We are banking on the fact that house prices will rise”

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  • it_is_going_with_a_bang says:

    It is exactly that sort of thinking that gets people into a lot of trouble. They have allowed themselves to be ‘talked’ into the idea that prices will ‘always go up’.
    £351K place with an Interest only.

    OMG.

    Thats all I can say really.

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  • “We are banking on the fact that house prices will rise,” says Jonathan. “It is ironic that we have waited so long to do it and now we are, people are talking of a crash.”

    Oh dear. I want to feel sorry for you but have sympathy fatigue for recent FTBs.

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  • Trendinvestor says:

    I remember being young and stupid i bought a 5 bedroom detached house for £164,000 in 1989 it cost me £71,000 in mortgage payments over the next few years and i spent £7000 doing it up. Then i was very lucky to sell it in 1994 for £148,000

    What a great investment that was, and what terribly short memories people have, also what a completely dire country Britain has become to live in when you listen to these very sad and very hopeless stories

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  • This makes me sad and angry. Sad that people get themselves in this kind of a situation, but very angry that the financial institutions seemingly cannot lose. As Meryvn said, house prices are a matter of opinion, but debt is real. Slaves indeed enuii.

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  • I feel sorry for these FTBs but cannot help wondering do they ever read the news? It never ceases to amaze me that the majority view is that house prices will not go down (in my personal experience) despite the fact that our financial system is in crisis after years of slack lending. I’d also like to know what was going through the minds of the bank staff who sold these deals? Do they not care that they are probably shafting these naive innocents or do they not understand that we are approaching a colossal debt hangover that might bust millions of people?

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  • it_is_going_with_a_bang says:

    “quiet guy said… what was going through the minds of the bank staff who sold these deals? Do they not care ”

    The answer is no. They want their commission. Thats ALL they care about.

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  • converted lurker says:

    TBH guys these FTBs are not representative of my experiences. These have been selected to order for a reason. FYIW guarantor mortgages are harder to come buy lately and I would suggest most parents are not moronic enough to re-mortgage their home to come up with a deposit for their child in this climate. What does concern me is the attitude, for example if you didn’t have the 50K off long departed Grandad what would you do; lower your sights, move slightly off your chosen area, find a place that you could build in some ‘sweat equity’? The real fear is deposit money and gifts can be wiped out at a stroke in this market with one poor decision – such as new build at full price with tinsel attached…

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  • Great time to buy – demand v supply – property has gone up an average of 11.74% per year for the past 40 yrs. The numpty who has this website sold property in 2002 predicting a crash – same move

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  • Oh dear oh dear oh dear.

    People that bought 2/3 years ago deserve sympathy. These lot deserve all they get.

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  • Unbelievable. Are these people supposed to serve as role models? Getting excited about Croydon?

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  • Well, if lucy & camilla.. put up a few “red lights” they’ll cover the mortgage.. no probs!!.. I would have said, nop sweat, but I’ve heard it is quite a strenuous occupation.

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  • after thought, maybe the father could be a pimp.. i forgot, that would be illrgal.. but a house of ill-repute would be legitimate..

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  • “The answer is no. They want their commission. Thats ALL they care about.”

    I think it’s more a case of them being diciplined and eventually sacked if they don’t hit their targets. I don’t think they’re evil people, just trying to keep their jobs.

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  • These people are idiots, renting would be much cheaper for them and allow them save money for when housing is cheaper, they could have stuck the savings and extra money in Gold and Silver, to make a much larger deposit later.

    My strategy is better save more in Gold and Silver than pay extra into my mortgage now. The current increase in the yearly Gold price far out-paces mortgage compound interest; when the differential closes I can ‘take profits’ and pay off much more capital than before.

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  • Louisa Smith: “a deposit of £50,000…. She was paying about £400 in rent per month, with bills on top, but is now paying about £400 in mortgage repayments and £400 in rent.”

    So from paying £400 per month, she is now £400 per month WORSE OFF, after investing £50,000. How does anyone decide that a yield of -9.6% pa on £50k is a good investment?

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  • Camilla Thornton: bought a two-bedroom EX-LOCAL flat in Battersea for £325,000?? Have you taken leave of your senses woman?

    “I rented for a while and I know that feeling of knowing hundreds of pounds going to waste each month.” So paying £400/month rent to a landlord is more of a waste than paying £900/month interest to a bank? Really shows how a few hours

    This whole article just demonstrates that if there were even basic lessons in personal finance on the school curriculum our country would not be in the mess it is now finding itself in. The winners will always be those at the top of the tree that have the knowledge…

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