What's the worst that could happen?!

GracieP

A studio in Wimbledon village for £200k!!!!!!! I at least assumed you were talking about Knightsbridge or Kensington.:eek:

There is a 2 bed apartment coming up for auction with Savills on the 16th in Wimbledon village with a guide price of £200k. It's lot 53. http://62.105.94.133/lond_Current_auction.asp Obviously that's it's guide price so we don't know what it will fetch on the day, but the fact that the guide for a 2 bed is the less than the asking on a studio should set the warning bells ringing if nothing else does.

Sir_Humphrey

Two points about buying a studio at £200k in zone 3 now with an IO mortgage.

1: With the credit crunch, it is unlikely such a mortgage would be granted.

2: Since anyone who did so (after research so this is not an accusation!) would have to be certifiably insane so would not qualify for a mortgage anyway.

EDIT TO CLARIFY: My point is that would be IO w/o repayment vehicle, and the studio would probably not pass a mortgage valuation.

StevieJ

Sir_Humphrey wrote: »

Two points about buying a studio at £200k in zone 3 now with an IO mortgage.

1: With the credit crunch, it is unlikely such a mortgage would be granted.

2: Since anyone who did so (after research so this is not an accusation!) would have to be certifiably insane so would not qualify for a mortgage anyway.

So they are not giving loans with 50% deposit now?

GracieP

I'm assuming that this is it? That appears to be above retail units which makes it undesirable to a lot of people. I lived in a flat on Elgin Ave in Maida Vale a few years ago. Sure it was nice being so close to the shops and restaurants but it was also incredibly noisy, busy, we had to deal with drunks pressing our buzzer at 3am and we perpetually had mice.

Most people would prefer to live a few streets off the high st as it's a better quality of life.

chewmylegoff

StevieJ wrote: »

So they are not giving loans with 50% deposit now?

the point was made regarding interest only mortgages without a proven repayment vehicle. it might be possible to get one with a 50% deposit, but it would certainly be more tricky than getting a repayment mortgage or interest only with a repayment vehicle.

if your plan is to leave the mortgage there and just pay the interest then the bank is likely to be sceptical in a falling market, especially on a studio flat.

LittleMissAspie

sliding_doors wrote: »

Added to that apparently Wimbledon Village is so desirable that it will be shielded from property decreases and it will always sell.

Men's dangly bits.

You could find some evidence of prices decreases in Wimbledon, perhaps on Property Bee or in some regional house price data. You could show her how prices in general have decreased by 11% in a year, so her 10% off is no bargain. You could show her mortgage approval data and show her how it translates into prices dropping for a minimum of 6 more months.

You could suggest she helps your brother by investing the money and using the interest to help him pay his rent. Then in a year's time use the 100k to get him something bigger - which they could rent out for more money in the long term.

At the end of the day though, it's her money to lose :undecided

Austin_Allegro

Dear God in Heaven, £200k for a bedsit in an outer London suburb?!

That's TWO HUNDRED THOUSAND POUNDS. Roughly eight times the average UK salary. For just one room.

Sliding Doors, please, please think about this and do some more research.

My advice is to put the money in a high interest account, wait, and get to know the London market. It's highly unlikely prices will go up again anytime soon.

Even if you have to buy now, I think you could get more for your money.

Wimbledon is a nice area but it's quite a trek from central and west London where the theatre and tellie jobs are.

sliding_doors

Wow - thanks for all the advice much of which I will be following up.

To GraceP: you are right that is the property in question . Not sure why I didn't what to give out the link in the original post - maybe I was worried someone would steal it but given the replies this shouldn't be a problem!

As its all out in the open I was wondering whether anyone had any particular knowledge about the area itself. My brother still maintains that it is a 'good buy if not a good investment' and argues firstly that Wimbledon Village is very different to Elgin Ave in Maida Vale and also that of the 100s of rental properties he has looked at this is the nicest. Does anyone have any more inside knowledge on this? Are you guys saying that £200k for a studio in Wimbledon Village is over priced ONLY because of the falling market or just in general (i.e. we could get a better property in the same area for the same amount).

Finally I know there is some debate on the forum about how long the crash will last. I was wondering if anyone has ANYTHING optomistic to say about this venture - Please note that I am very against this whole idea and am only trying to pursuade my family so am trying to get a fair and unbiased picture.

Thanks for all the help so far - much appreciated as it will hopefully save my inheritance (if not my sofa bed - only joking A!)

lostinrates

Wimbledon is lovely. Lots of tv people live there....but the kind that have drivers to get to work Its a great family area...predominantly. Its not where I would live if I were a single young male, nor a luvvy. It really doesn't leap out as the most suitable place for him, and not in a cool way. I'm not dissing Wimbledon, as I say its lovely, just, well....

but look, regardless of the very serious financial implications, what do we kno about your brother? He could really be the suburban type, and there is nothing wrong with that at all. Its not, as Austin Allegro said, ideal for theatre land (although Northernline would get you to Shaftsbury ok, I'm thinking about the home trip ) or studios ..hich is hy the younger people, often couples, living there are usually renting waiting to buy or working in lower than great-for-London salaries and not cool enough or too sloe for the Spittalfields pre rejuvenation.

Incidently, their is a cheaper studio in Camden on the houseprices forum. I have alked out from theatres to thereabouts many a late night, its cheaper, cooler (if you like that sort of thing) he can walk on Primrose Hill or the Heath if its Wimbldon Common that is the draw and lots of people in theatre and film and tv live in that sort of area.

sliding_doors

Thanks lostinrates - I don't think Wimbledon would be my brother's choice but it's an area which my mother is familiar with and so believes is 'low risk'. I just spoke to her and her view is that if things really go bad she will be able to rent it out for £1000 a month (this would cover her even if the interest rate goes up to 10-12%). I was wondering whether anyone had any knowledge of the rental market in Wimbledon Village? This lovely fact was mentioned by the estate agent and confirmed by a friend who lives there (god knows how she knows what she is talking about though!)

In terms of the repayment vehicle, the mortgage broker (/adviser?) was around when I rang and the extra £100,000 is going to be secured against our house :eek: . Is this as potentially worrying as it sounds? Although I have not spoken to her in full about it yet, she is somewhat single minded and is proving quite difficult to deter (HELP!)