negative equity, bought a lemon, now working over seas

blahbob

So you think property is more like a train slowly gong off the edge of a cliff? In which case I should sell at a discount now and cut my losses?

I think I'm coming to terms with the fact that

a)I cant sell, because there are no buyers.
b)Prices are due a 30% fall to match interest rates and the average trend over 20 years
c)I will have to watch it fall for 4 years, and wait for 4 more to get my 15K back
d) DOH! (sound of me going off cliff with train)

LisbonLaura

blahbob wrote: »

So you think property is more like a train slowly gong off the edge of a cliff? In which case I should sell at a discount now and cut my losses?

Trains don't rocket up into the stratosphere on lies & sentiment alone, hence the burst bubble analogy is probably better?
All that is sitting in the sky right now are those telephone number asking prices in soon to be closed shop windows.....unless I've missed something?

Sorry blahbob, it must be hell caught up in this. I don't think I would be thinking clearly at all if I was; who would?


High inflation might come to the rescue, but.......



Of course some naughty people would grab the rent money for as long as possible, not pay the mortgage, cover their tracks & never come back.

EdInvestor

blahbob wrote: »

So you think property is more like a train slowly gong off the edge of a cliff? In which case I should sell at a discount now and cut my losses?

I think you need to think about what was the purpose of the investment at the start.Was it a very long term "pension replacement" type geared investment, where the return would be a mix of capital gains (over say 25 years) and (rental) income - which would cover the mortgage or close to it now, and later, as time went on, would probably provide an additional return as rents went up?

If this was the idea, then there is no need to panic over short term volatility in the capital value of the investment - this must be expected now and again over such a long term view. Your main concern is covering the mortgage interest with the rent.

If you were looking at the investment as a replacement pension, one of its attractive features might have been that no "pension contributions" were needed, because the tenant paid them.Lookrd at like this, if you have to provide a top-up contribution now and again, is it still not likely to be a competitive investment looking over the 25 year period compared with a conventional pension where you invest several hundred pounds a month into the stockmarket, where the value is also going to fluctuate?

If this was your strategy, then just hang on in there, it might mean you have to pay up a bit for a while but things will resolve themselves in due course.

Of course if you're just a short term speculator, then you got it wrong big time.

EdInvestor

LisbonLaura wrote: »

Ed, the lending situation now IS close to normality.

It's the last few years that have been abnormal, - as you well know.

Nonsense.Mortgage approvals are down by 64% - that takes us back to the times when when only building societies where allowed to lend and less than half of the British population owned their own homes, compared with 70% now.

The problem is in the mis-management of the securitisation system(which has been with us since the 1930s, it's also hardly a new idea).

It will be sorted eventually.The banks are always getting themselves in a mess over risk but they will fix the problem in the end. Meanwhile anyone who can avoid selling should do so it just isn;t worth the hassle.

UK007BullDog

I am looking at this at a different angle.

1. One day you might want to return to the UK. Lucky you, you have a place to move right into!

2. As for the tax, see a tax specialist, he might be able to work your stuff so that you are no worse off or even better!

3. See a broker when the deal finishes as you might be able to get a mortgag deal which is quite good as an overseas mortgageer. Barclays have some really good deals, well lets say had but have not done any in years. Also when your deal finishes you get a BTL mortgage and that could be better than any SVR.

4. It would help if the lender can see the rent payments coming in where you also pay your mortgage automatically. That way it is much easier to get a BTL mortgage with that lender.

5. Give serious thought to the offer Councils make to landlords, however if you dont like your new job you cannot kick them out before the time is up. But they will put the house back ina good state if roughnecks were in it and your rent is always coming in, if someone lives in it or not.

UK007BullDog

PS: a new bathroom, double glasing and new garden plus other stuff is expensive and you got a good deal, as you also have no hassles of repair work.

LisbonLaura

EdInvestor wrote: »

Nonsense.Mortgage approvals are down by 64% - that takes us back to the times when when only building societies where allowed to lend and less than half of the British population owned their own homes, compared with 70% now.

Building societies only....what an excellent idea. It's when the banks get involved that the problems begin.....again

Own their own homes? --- Not with a mortgage attached they don't!


Ed, I do love your posts.

Just a bit of a tizz over securitisation ..... it will be fixed in a jiffy will it? :rotfl::rotfl:

I shouldn't laugh......a total catastrophe is approaching

blahbob

UK007BullDog wrote: »

PS: a new bathroom, double glasing and new garden plus other stuff is expensive and you got a good deal, as you also have no hassles of repair work.

Thats what I'm hoping, plus the extra work I did...

Originally the intention was to live in the house, I'm not really an investor. If I can keep hold of it for 10 years then I think will come though OK. Its just dam scary at the moment with peak oil, global warming, food crises, over population etc. I'm pretty sure the pending economic situation is unprecedented. But then again 10 years is a long time.

owitemisermusa

Bulldog,
I've been away and probably missed something. Just saw your sig, are you seriously retired?
When did you retire?
Hope it's not a dumb question but it seems a lot happens when you blink on this site!
OMM

EdInvestor

blahbob wrote: »

Originally the intention was to live in the house, I'm not really an investor.

Ah so, banks will usually look differently on a homeowner who is posted abroad and wants to let the property while he's away - not the same as a BTL investor.While things may look gloomy at the moment, the UK property market has a history of rapid change, and many are the expats who regret selling out on departure and finding it costs hugely more to get back in again on their return a few years later.