Property crash, just maybe it really is different this time (Part 3)

[belfastchild]

8 minutes ago, JoeDavola said:

I am perhaps being Belfast-centric....the idea being flat/terrace as 'starter home' and a decent 3 bed semi as a second step up - I'd call a 3 bed semi mid-market though maybe I'm just over-estimating what the average house is like based on the money I and the people know have and were brought up in.

£250K certainly isn't the higher end of the market IMO. And that's without taking into account a better than average semi i.e. a 4 bedder or somewhere designated a 'desirable' area which I'm pretty sure are going to be £500K within a few years:

Mid terrace approaching a quarter of a million:

Mid-terrace in Sydenham which is (or was) as working class as they get in terms of areas now not a kick in the arse off that £177K average, but maybe this actually does represent the average house more than a semi?

As Ive said before Joe, you could buy my house tomorrow for cash and own it outright at a younger age than I did, although with each year passing that will eventually not be true.

You wouldnt live in my house though. Thats the issue and my house isnt even a starter home, generally speaking 3 beds arent. The average house in NI is a 3 bed semi, the average price of a 3 bed semi is 172k which is less than the covid peak with all those 50k loans floating about. The average price of a terrace is 123k and an apartment 130k.
New average prices are whats keeping everything high (due to the build costs) at 219k whereas average price of 2nd hand houses (for the want of a better term) is 168k. New prices are continuously climbing, whereas older houses are starting to fall. Ironically that divergence only happened last year really.

All your examples above are in the most expensive areas of Northern Ireland. If you choose to look in the most expensive area of Northern Ireland, you cant really be surprised that the prices are the most expensive in Northern Ireland. Its not representative though. One of the houses I went to look at last weekend accepted a cash offer of 155k for a 3 bed semi with big garden a 5 min walk from the main bus route into town in Carnmoney. That was the asking price and whilst they were starting to get offers above that, they were pissed off with time wasters coming in and people who didnt look like they could get the money together as it had already fallen through twice before with people having been pre-approved but turned down when the finances were examined by the banks.

As for that reddit thread, got to the half wit talking about timber framed houses and just laughed.

 

[JoeDavola]

1 hour ago, Cosmic said:

While not student levels I've not increased my 'lifestyle' since I was on 15k...

I guess by student I mean things that I spend money on outside of the roof over my head. And as you say there's things that I no longer spend any money on like video games or guitars because I've got everything I'll ever need in that regard.

[JoeDavola]

33 minutes ago, belfastchild said:

As Ive said before Joe, you could buy my house tomorrow for cash and own it outright at a younger age than I did, although with each year passing that will eventually not be true.

You wouldnt live in my house though. Thats the issue and my house isnt even a starter home, generally speaking 3 beds arent. The average house in NI is a 3 bed semi, the average price of a 3 bed semi is 172k which is less than the covid peak with all those 50k loans floating about. The average price of a terrace is 123k and an apartment 130k.
New average prices are whats keeping everything high (due to the build costs) at 219k whereas average price of 2nd hand houses (for the want of a better term) is 168k. New prices are continuously climbing, whereas older houses are starting to fall. Ironically that divergence only happened last year really.

All your examples above are in the most expensive areas of Northern Ireland. If you choose to look in the most expensive area of Northern Ireland, you cant really be surprised that the prices are the most expensive in Northern Ireland. Its not representative though. One of the houses I went to look at last weekend accepted a cash offer of 155k for a 3 bed semi with big garden a 5 min walk from the main bus route into town in Carnmoney. That was the asking price and whilst they were starting to get offers above that, they were pissed off with time wasters coming in and people who didnt look like they could get the money together as it had already fallen through twice before with people having been pre-approved but turned down when the finances were examined by the banks.

As for that reddit thread, got to the half wit talking about timber framed houses and just laughed.

Now listen you you cu...

...only joking.

Yes I can buy something outright and don't feel hard done by even if I sometimes sound like that. We tend to judge our situation relative to the people around us which perhaps makes me feel worse off that I am in the big picture.

"a cash offer of 155k for a 3 bed semi with big garden a 5 min walk from the main bus route into town in Carnmoney"

See I read that and it feels to me that I've not seen those kinds of prices in 5+ years. Was that house even listed publically? I think you also have a slight bias in what is the cheapest part of Belfast being where you live and where you're looking, but £155K for a 3 bed semi a walk to a metro bus is a cracking deal.

Fair point about the new-build premium I had noticed too that newbuilds seem to be aimed at higher and higher ends of the market I wonder is this because recent inflation means that you can't actually get a plot and build a house for say £160K and make a profit any more...

And yes I'm basically looking at places where I could commute into south belfast in half an hour via train (EDIT: or bus) basically, which perhaps comes at a premium, thankfully I was never interested in BT8 fuck me the prices there...

 

Edited May 4 by JoeDavola

[belfastchild]

1 minute ago, JoeDavola said:

I think you also have a slight bias in what is the cheapest part of Belfast being where you live and where you're looking, but £155K for a 3 bed semi a walk to a metro bus is a cracking deal.

I think you will find that thats the reason why I live where I live. I wasnt prepared to pay the prices for Sharman or Lisburn Road etc at the time. Friends paid more for a 2 bed flat on stranmillis than I paid for my whole house, car and years of bus tickets! They were paying the walk to work premium.
I was looking somewhere more affordable a 15 min drive or 1/2 hour bus ride direct to work in the centre of town, in a place with its own restaurants, pubs, cafes, supermarkets.

Its still the same place as it was 27 years ago.

I thought 155k was 10k more than it was worth!

[JoeDavola]

2 minutes ago, belfastchild said:

I think you will find that thats the reason why I live where I live. I wasnt prepared to pay the prices for Sharman or Lisburn Road etc at the time.

Actually both very overrated places IMO especially these days. Don't get why you'd spend a huge premium to live in either.

[belfastchild]

Just now, JoeDavola said:

Actually both very overrated places IMO especially these days. Don't get why you'd spend a huge premium to live in either.

Was in Ballyhack for lunch yesterday, 10 years ago you wouldnt have been seen dead having lunch there. In 10 years time it will be the same, it will be somewhere else that will be fashionable.

[JoeDavola]

1 minute ago, belfastchild said:

Was in Ballyhack for lunch yesterday

[TNS]

33 minutes ago, JoeDavola said:

Now listen you you cu...

...only joking.

Yes I can buy something outright and don't feel hard done by even if I sometimes sound like that. We tend to judge our situation relative to the people around us which perhaps makes me feel worse off that I am in the big picture.

"a cash offer of 155k for a 3 bed semi with big garden a 5 min walk from the main bus route into town in Carnmoney"

See I read that and it feels to me that I've not seen those kinds of prices in 5+ years. Was that house even listed publically? I think you also have a slight bias in what is the cheapest part of Belfast being where you live and where you're looking, but £155K for a 3 bed semi a walk to a metro bus is a cracking deal.

Fair point about the new-build premium I had noticed too that newbuilds seem to be aimed at higher and higher ends of the market I wonder is this because recent inflation means that you can't actually get a plot and build a house for say £160K and make a profit any more...

And yes I'm basically looking at places where I could commute into south belfast in half an hour via train (EDIT: or bus) basically, which perhaps comes at a premium, thankfully I was never interested in BT8 fuck me the prices there...

 

Looks like a bargain to me given that amount would barely get a shit 2 bed flat here.

[JoeDavola]

4 minutes ago, TNS said:

Looks like a bargain to me given that amount would barely get a shit 2 bed flat here.

Yes that's the funny thing when I quote NI prices they will be a bargain compared to much of the UK.

Mind you, there's also parts of NI where you'd pay that much for a 2 bed flat as well.

[TNS]

Just now, JoeDavola said:

Yes that's the funny thing when I quote NI prices they will be a bargain compared to much of the UK.

Mind you, there's also parts of NI where you'd pay that much for a 2 bed flat as well.

Do you think you'll buy soon ?

[JoeDavola]

28 minutes ago, TNS said:

Do you think you'll buy soon ?

Yes.

[spygirl]

‘I bought my three-bedroom shared ownership home aged 25 with only a £13,250 deposit’

Teacher Farhana Mallick bought a shared ownership home in the Royal Docks, at the centre of a £2bn regeneration zone.

https://www.standard.co.uk/homesandproperty/buying-mortgages/i-bought-my-threebedroom-shared-ownership-home-aged-25-with-only-a-ps13-250-deposit-b1155069.html

Farhana Mallick was only 25 years old when she found herself exhausted by renting in London.

“I decided I was done losing my money on rent,” Mallick, now 27, says. “I wanted to invest in a property and have a home I could make my own.”

Previously she’d lived at home with her parents in east London, where she was raised, or rented a tiny room in a shared house for £400 a month.

As a history teacher at a school in Barking and Dagenham, she was one of the key workers increasingly priced out of living in the city where she worked. But scraping together a deposit large enough to buy somewhere near her family and workplace was tough.

“In London, the house prices are now very high — if I hadn’t bought with shared ownership, I would still be renting or living with my parents,” she says. “It gives you a lifeline, especially for someone in their 20s or 30s.”

 

Mallick took out a mortgage on a 25 per cent share of a three-bedroom apartment in the Royal Albert Wharf development in Newham, east London.

The property was on the market for £530,000, so a 25 per cent share equated to £132,500. That required a deposit of £13,250 — far below the three-figure deposits buying in London can now require.

 

“Shared ownership really appealed to me because it meant I required a much smaller deposit than if I was buying privately,” says Mallick.

Her monthly costs are £1,391 for the three-bedroom flat. Of that, £606 goes on her mortgage and £497 on rent for the part she doesn’t own, plus a £288 service charge.

Although it’s much more than she was paying on rent for a room, Mallick is very happy with the level of freedom and space her home gives her.

[Boon]

Doesn't square up to me. It sounds like a bit of an advert.

So the purchase price was £530000 and her share is £132,500, so she is being charged £497 a month on £397500?

Idk much about shared ownership but the rent is 2.75% on the portion you don't own. 

So mortgage cost = £606
Shared ownership = £910
Service charge = £288
Almost certainly these flats have district heating = £100-200

Seems absolutely unaffordable as a teacher living on their own.

Edited May 4 by Boon

[Google247]

Yeah that doesn't ring true

Also there is literally nowhere anywhere near London you can rent a room for 400. Most places even double that won't get you a room

Also being a teacher for a maximum 6 years won't see her take home pay at more than 2500 a month

Seems a load of made up nonsense

But good to link back to in a few years when she is complaining that her rent and service charges have doubled and the flat has lost 100k in value

[Wight Flight]

1 hour ago, Google247 said:

Yeah that doesn't ring true

Also there is literally nowhere anywhere near London you can rent a room for 400. Most places even double that won't get you a room

Also being a teacher for a maximum 6 years won't see her take home pay at more than 2500 a month

Seems a load of made up nonsense

But good to link back to in a few years when she is complaining that her rent and service charges have doubled and the flat has lost 100k in value

You won't even get a room here for £400, let alone London.

[With a crooked smile]

12 hours ago, belfastchild said:

That was the asking price and whilst they were starting to get offers above that, they were pissed off with time wasters coming in and people who didnt look like they could get the money together

A friend of mine sells caravans and motorhomes. Most of his stock is new with some secondhand. Nothing is cheap.

His two types of customers are those just retiring with a pension draw down and what he calls young lads (probably about 30) who work in the trades and turn up with the wife and kids and with most of the money in cash in a Tesco's carrier bag. I doubt the t look like they could afford a caravan either. 

Edited May 4 by With a crooked smile

[JoeDavola]

Is it fair to say that these mortgage rates rising up slowly (seem to be almost 6% according to the media) are an indicator that this is absolutley is the 'new norm' and that they're not expecting a return to low interest rates in the future - or is it more complex than that?

[Wight Flight]

19 minutes ago, JoeDavola said:

Is it fair to say that these mortgage rates rising up slowly (seem to be almost 6% according to the media) are an indicator that this is absolutley is the 'new norm' and that they're not expecting a return to low interest rates in the future - or is it more complex than that?

Logically yes. Inflation at 2%, base rate at 4%, mortgage rate at 6%.

But logic doesn't apply where house prices are concerned.

[JoeDavola]

22 minutes ago, Wight Flight said:

Logically yes. Inflation at 2%, base rate at 4%, mortgage rate at 6%.

But logic doesn't apply where house prices are concerned.

Oh I’m not expecting it to affect house prices in much of the uk, just want an idea of what those who do need mortgage debt in the uk should be pricing in long term - seems likely it’s 6%.

Edited May 5 by JoeDavola

[Wight Flight]

23 minutes ago, JoeDavola said:

Oh I’m not expecting it to affect house prices in much of the uk, just want an idea of what those who do need mortgage debt in the uk should be pricing in long term - seems likely it’s 6%.

Possibly.

If so, if I was to buy my little house here is would cost me £36k a year in interest alone.

I think I will stick with renting for now.

[JoeDavola]

3 minutes ago, Wight Flight said:

Possibly.

If so, if I was to buy my little house here is would cost me £36k a year in interest alone.

I think I will stick with renting for now.

DOSBRAG

[Wight Flight]

Just now, JoeDavola said:

DOSBRAG

Not at all.

It is just a little two bed place but its value went mental with lockdown.

[JoeDavola]

1 minute ago, Wight Flight said:

Not at all.

It is just a little two bed place but its value went mental with lockdown.

Actually come to think of it…at 6% the mortgage council tax and building maintenance fee on my hovel is 35% more than I pay in rent.

[Wight Flight]

1 minute ago, JoeDavola said:

Actually come to think of it…at 6% the mortgage council tax and building maintenance fee on my hovel is 35% more than I pay in rent.

I am wondering how smug the people that bought my last place are feeling now?

They bought it for £500k as a holiday home, their logic being they usually came for the whole of August anyway (when the Fulham crowd descended) and the interest on their mortgage wouldn't be any more than the £8k they spent on their holiday rental.

Oops.

[JoeDavola]

16 minutes ago, Wight Flight said:

I am wondering how smug the people that bought my last place are feeling now?

They bought it for £500k as a holiday home, their logic being they usually came for the whole of August anyway (when the Fulham crowd descended) and the interest on their mortgage wouldn't be any more than the £8k they spent on their holiday rental.

Oops.

Do you know that they bought with a mortgage?