Advice needed on stepping up the ladder

Paul1706

I am currently thinking about stepping up the property ladder. I own a 2 bedroom purpose built apartment in Middlesbrough. I purchased the apartment for £130 000 approximately 3 years ago. The developer paid the 5 % deposit and I also put down a £30 000 deposit myself. So the mortgage currently stands at approximately £85 000. Looking in the local property papers and rightmove other apartments in the development are valued from £110 000 to £120 000, but nothing appears to be selling.
Should I put off my step up the ladder until the market has stabilised even though I am desperate to move? Another option I was thinking of was part exchanging the property for another new build.
Any advice would be appreciated.

markandjayne

Hi
we are in a similar position in Leeds.
My view (for what its worth) is that IF you can sell your property at a sensible price, then now is an excellent time to move up the property ladder. Whatever you drop your property price by, you should be able to achieve a larger saving on your new more expensive property.
A 10% fall on a £130000 property is 13k, on a 250k property is 25k.
Clearly you have to take into account moving costs, stamp duty etc.
My advice would be to find out more about your target properties, talk to the estate agents, find out how much houses in your target area have dropped and if they are continuing to drop.
Until you have sold your flat, there is very little else you can do other than research, research and more research.
Good luck

Paul1706

Thanks for the advice.

IHS88

Hi Paul

Great advice by MarkandJane.

Im sorry to say that your property is probably worth roughly what you paid for it.
Sure it had risen in value in the 3 years since you purchased it, but an oversupply of apartments in Manchester and the property slump have dented values.

The large developers who have an established part exchange arrangement dont typically pay the full market value.
I'd expect them to offer you 85% of your properties value, but shop around.

Remember developers are despeate to do deals.

Knocking 15% off the value of your apartment may seem like a lot but if you can secure 35% to 40% off the price of a new build, your loss looks more like a gain.

These discounts are available! Dont be afraid to make "silly offers".

swaninn

I agree with IHS88, most things developers 'say' about what they need to sell the property for is not true and 35-40% is reasonable in this market.

Another good idea is to ring around some property auctions (Allsop a National company and Pattinson nr you) and gauge how much similar new builds are selling for at auction (this might be repossesions also) and that is a very good indicator of how much a property is 'actually' worth, as if no one is willing to buy then the only way is to sell at auction.

E.G. my research found that a new build in Mancehster originally purchased for £309,000 in 2006 is now selling as a repossesion at auction for £200,000!!!

Turnbull2000

swaninn wrote: »

E.G. my research found that a new build in Mancehster originally purchased for £309,000 in 2006 is now selling as a repossesion at auction for £200,000!!!

I've seen this one in Newcastle...

Bought 2005: 190K

Sold 2008: 90K

Beat that