Colossal Buy to Let Loss

napoleon

Funny story, the btl vultures don't like it up 'em. £225K for a shoebox. Hoho. He should have MUG stamped on his forehead.

http://www.thisismoney.co.uk/mortgages/buy-to-let/article.html?in_article_id=445743&in_page_id=56

A property investor who bought a flat for £175,000 at the height of the housing boom has ended up in a negative equity nightmare after its value nosedived by almost 50%.

Changing fortune: Maurice Conroy outside his studio in Pimlico, which has plummeted in value




Maurice Conroy, who owns a string of buy-to-let flats, bought the studio in Pimlico last summer. But he has just had it valued by three agents who told him it would now only sell for £80,000 to £100,000. He is one of a growing number of buy-to-let investors who are discovering the property market is not necessarily a safe alternative to a pension.
Mr Conroy, 43, from Chelsea, admits he paid over the odds for the flat a year ago, but said the news left him reeling.
'It's like being hit in the stomach,' he said. 'It's the biggest drop I've heard of and I scan all the property news. A £95,000 drop - that's 50%. Even if it sold for £100,000 that's 40%. I questioned the agents and they said they cannot value it at more than £1,000 a foot.'
Two agents valued it at £100,000, while Hamptons International said it was worth no more than £80,000.
The flat, in a Regency stucco-fronted terrace in Winchester Street, is 120 square feet - the size of a small double bedroom. It has a separate bathroom, a kitchen area and room for a sofa bed.
Mr Conroy and partner Caroline Faulkner secured it after a bidding war last August. Its original asking price had been £150,000.
'Two bids came in at £160,000 and because we wanted it we decided to go for £175,000,' he said. 'At that time it only meant an extra £20 or £30 a month on a mortgage. I had it valued soon after and was told it could make £225,000.'
Mr Conroy had it valued this week as he looked to release some capital to invest in a house .
Sean Williams, assistant manager of Hamptons in Pimlico, said Mr Conroy had been a victim of last year's overheated market. 'I think they paid over the odds by a factor of three,' he said.
'Things got rather silly last year. I am amazed there were even bidding wars going on for that property at that sort of level.'
Mr Conroy has now decided to keep the flat, but with sales down by as much as 70% since Christmas, landlords whose rental income does not cover the mortgage are in a serious financial trap.



Some reader comments:

1. I love the comment "I had it valued soon after and was told it could make £225,000" - for 120 foot studio (cupboard). Wow, I wonder whether he wants some dutch tuplips as well?

- Bradley, London Posted: 4 July 2008, 3:57pm

2. 120sq ft flat! It`s a pigsty. It serves him right. He should move in there with his girlfriend and start family.

- Mannering, Walmington-on-Sea Posted: 4 July 2008, 4:01pm

3. If this guy was just stupid then I would be sympathetic, but he was stupid and greedy and therefore deserves everything he gets. It continues to depress me that we live in a country where someone might actually pay 80K for such a pointless flat. I might be prepared to offer him £5K for it.

- Mike, London Posted: 4 July 2008, 4:03pm

Dithering_Dad

I think this has already been the subject of a thread, though I can't be bothered trawling about trying to find it to confirm.

Hold on, I'll log on as !!!!!!? have a look in the MSE archives, that username of mine loves to grub around in the dirt and cobwebs. I'll be back in a mo as !!!!!!? with some insightful information on the subject of everything....

Cannon_Fodder

As Generali said to CarolT and JustPurchased on another thread, why can't you keep you barney with !!!!!!? to 1 or 2 threads.

Let a new thread run its course.

You are first to moan when you consider you've been "attacked", but here you are starting it all off again.

Let it go. Please.

Dithering_Dad

Cannon_Fodder wrote: »

As Generali said to CarolT and JustPurchased on another thread, why can't you keep you barney with !!!!!!? to 1 or 2 threads.

Let a new thread run its course.

You are first to moan when you consider you've been "attacked", but here you are starting it all off again.

Let it go. Please.

The point of my post was to say that this has already been discussed. The dig at !!!!!!? was just an aside for a bit of fun. Had this not been a repeated thread then I wouldn't have commented, because as far as I'm concerned I'm not interesting in revelling in someone's discomfort.

I guess it must be a slow 'bad news' day today, so we're now resurrecting old discussions to talk about all over again.

Be my guest. Please.

p.s. It's a fair comment when it comes from Generali, who doesn't have any 'argie bargie' with anyone, but a bit hypocritical from yourself who does like to 'get personal' and indulge in argie-bargie quite often, don't you think?

fatpig_2

120 square feet? Huhhh. My dog's kennel is nearly bigger than that. How does this chancer expect anyone to live in that? I'm delighted he got stung badly the greedy so and so

dudleyboy

Dithering_Dad wrote: »

I think this has already been the subject of a thread, though I can't be bothered trawling about trying to find it to confirm.

Hold on, I'll log on as !!!!!!? have a look in the MSE archives, that username of mine loves to grub around in the dirt and cobwebs. I'll be back in a mo as !!!!!!? with some insightful information on the subject of everything....

Hehe... that made me laugh.

DD, you certainly get about.

Austin_Allegro

Just shows how in boom times every grotty little hole and corner gets tarted up and pimped along the property ladder. Come the bust, this kind of rubbish will go back to being the broom cupboard it was always intended to be.

Good point in the comments about how unusual it is for square footage to be mentioned in property. This is kept quiet because 'three bedrooms' etc sounds better.

GDB2222

fatpig wrote: »

120 square feet? Huhhh. My dog's kennel is nearly bigger than that. How does this chancer expect anyone to live in that?

Is that 120 sq ft PLUS the bathroom and kitchen area, or 120 sq ft all-in?

I expect that nobody would want to live there full-time, but someone might rent it who has to work in London but lives some distance away. Someone using it on their own, just 4 nights a week, might be reasonably ok in it. At £100 a night for a hotel room in the area, this might seem positively cheap!

ad44downey

120 sq. feet in total it is. If I said I was in any way sympathetic to this guy I'd be lying.

Even the estate agent in the article seems to be gloating a bit!!

Guy_Montag

Is it just me that thinks we should introduce minimum standards for housing, including a minimum size for a dwelling. 10ft x 12ft !!!!!!.

WTF?_2

Guy_Montag wrote: »

Is it just me that thinks we should introduce minimum standards for housing, including a minimum size for a dwelling. 10ft x 12ft !!!!!!.

There are certainly standards for social housing and I believe that one obstacle to local authorities buying up failed BTL blocks to use as social housing is that the overpriced rabbit-hutches don't meet them.


I don't think that people will be putting up with real estate dross like that until the next property boom.