Has anybody bagged a bargain?

huntersc

sarah_elton wrote: »

If 50% of their take home pay covers rent, commute and clothes, why on earth do they need to put food on credit cards?

My mortgage, bills and commute take around 50% of my take-home and I'm saving money each month!

Well, there are things like gas bills, electricity bills, council tax, car running costs, school fees, children's nursery costs, entertainment, contents insurance, building's insurance, life cover, pension, trust fund payments, mobile phone, internet the list goes on. I'm sure you are saving, and that's very good but not everyone can afford to pay out 50% of their income on mortgage, tube and clothes.

Let's break it down very roughly taking that property as an example.

£135k purchase price
10% deposit = £13.5k
Moving costs = £2.5k
Savings = £5k

Mortgage required = £114k

£114k/3 (average wage required for such a mortgage) = £38k

Income £1900pm

So, costs per month

Mortgage - 800
Food - 300
Tube - 120
Clothing - 50
Gas - 20
Electric - 20
Council Tax - 100
TV licence - 10
Internet - 20
Phone - 10
Mobile - 35
Pension £100
Entertainment - 200
Contents - 20
Building's - 20
Water - 20
Life Insurance - 25

So that adds to about £1860 which would allow a saving of £40pm? Those are of course rough estimates but I've not added in odds and sods like haircuts nor have I included costs such as car, holidays, Christmas, birthday presents etc etc.

I'm also assuming savings of around £20k and no debt at all which is being kind.

Sure some people can save but they'd save an awful lot more by going out of Town and earning a little less. On top of that they could own a much nicer house and not have to live in a rat infested squat costing £135k.

huntersc

hethmar wrote: »

And a lodger in a spare room can help enormously towards bills.

In a one bed flat? Would be cosy I suppose and save on heating bills.

PropertyPro

huntersc wrote: »

I could tell you had estate agent in you, the way you talk, it's very obvious.

They'd be lucky to sell it for £100k right now. Nothing's selling as you well know. Either it'll be on the market for another two years and increase to £115k in 2012 or they reduce the price dramatically to get it off the books. I'd say £75k right now is more realistic. Maybe negotiable up to £85k.

The only thing that might throw a spanner in the works is stupid people. Those that tend to buy places like that are generally out of touch with economic circumstances and don't have access to the right financial advice to make an informed decision. They go jumping in at £130k thinking it's a great bargain and get burned. I do hope that no one buys that place at over £100k, it scares me that someone could ruin their life by doing so.

And there I was thinking I had hidden my estate agent past succesfully.

I think we'll all be keeping an eye on this property to see what happens over the coming weeks or months. I'm certain that nobody will go in at £130,000 and I feel they will be foolish to do so. However, I still think it will go at above the 100k for the reasons I explained earlier.

Buyers can ruin their life in any market if they don't do their research properly in regard to their finances and they should be looking at making suitable offers that sits within their budget. Most people do that as is shown by many of the posts in this thread.

What is being shown is that buying a property is not neccesarily a bad thing to do at the moment as long as the buyer has looked at everything carefully.

huntersc

PropertyPro wrote: »

And there I was thinking I had hidden my estate agent past succesfully.

I think we'll all be keeping an eye on this property to see what happens over the coming weeks or months. I'm certain that nobody will go in at £130,000 and I feel they will be foolish to do so. However, I still think it will go at above the 100k for the reasons I explained earlier.

Buyers can ruin their life in any market if they don't do their research properly in regard to their finances and they should be looking at making suitable offers that sits within their budget. Most people do that as is shown by many of the posts in this thread.

What is being shown is that buying a property is not neccesarily a bad thing to do at the moment as long as the buyer has looked at everything carefully.

Whether it goes for above £100k is down to the credit available. A buyer would need at least a £15k deposit along with conveyancing costs etc they might get closer to the £20k figure. Who, buying a property such as that, has that kind of money available (and has no debt?)

If the credit situation eases then sure, it might even go to £200k at some point but if, as I believe, mortgages will be hard to come by for some time then I think we'll see that property remain unsold.

But you never know, some idiot might just go ahead and waste theor money, you never know what people are thinking.

uk_steve

well for me and a friend we bought a flat @ auction 3 weeks ago we complete this friday, its a 1 bedroom flat in the right part of our town,we have taken a mortgage of 40k flat cost 65k plus fees, intrest only mortgage = £200 pcm
Estimate rental icome from Estate Agent is £375-£395 pcm, the same flat sold 10mths ago for 95k but buyer pulled out.

Its the 1st time we have stepped up to become BTL landlords

Our goal is 10 years or when there is a good return to sell again on the open market.

we both feel that its right time to move our money out of savings and give this a go over the next 18mths, you can see above we are leaving a lot of movement on our mortgage structure for the rocky roads ahead, we also feel there will be more bargains as time goes by hence why we started now, to get to grips with the business structure now....

lynzpower

http://www.rightmove.co.uk/viewdetails-22696916.rsp?pa_n=1&tr_t=buy&mam_disp=true

Seriously, I doubt anyone would find a better area than this, although it is zone 3.

I used to live around the corner from these, the area is fantastic.

No garden though or else we would have bought one of these when they were on for 160

huntersc

This one isn't too bad either, http://www.rightmove.co.uk/viewdetails-10592502.rsp

With Property Pro's services the OP could probably get it down to the £135k mark. Shouldn't be too difficult and it's a lot nicer than, as others have described it, that hovel

sarah_elton

uk_steve wrote: »

Wow thats a big BIG price diffrence:T

He also had a good deposit so he reckons unless something crazy happens in the market, he won't end up in negative equity unless it burns down and they prove he did it.

sarah_elton

huntersc wrote: »

Well, there are things like gas bills, electricity bills, council tax, car running costs, school fees, children's nursery costs, entertainment, contents insurance, building's insurance, life cover, pension, trust fund payments, mobile phone, internet the list goes on. I'm sure you are saving, and that's very good but not everyone can afford to pay out 50% of their income on mortgage, tube and clothes.

Let's break it down very roughly taking that property as an example.

Not to turn this into the DFW board or anything, but I would say that for a single person (which you're assuming since the mortgage is all coming out of one salary), (1) there's no way they should be spending £300/month on food, and (2) £250/month for entertainment and clothes is a lot!! I don't bother with life insurance because there's no reason too when you're single, and house insurance looks expensive but I guess that's London for you. Mine's under £100 a year for contents only (no buildings as I live in a flat).

I agree re living out of London though. I mix - I work in London and commute in from north Essex. Mortgage of £600/month and train fare of £314 but I get to live in a two bed flat with country views. (one in negative equity as you'll have seen on other threads but that's another story)

Edit: I don't mean to argue particularly, I was just trying to figure out what was going on since I earn only a bit more than the figure you're talking about, and have a £115k mortgage. Obviously also your mention of school fees, trust funds etc aren't likely to apply to someone living in the properties we're talking about. And if they were paying those and having to put food on credit cards then something's wrong!

beingjdc

For anyone still stressing that I will be buying that flat (I won't be, I said, I'm not interested in buying now, I don't want to buy in SE16, and I want more than one bedroom), I will note that the last transaction for the block according to houseprices.co.uk was £183k for a 2-bed flat in May this year.

The £75k that people are suggesting as a fair price is coincidentally enough around what 1-beds in the block were changing hands for in 2000-1, so I guess it's not impossible if prices continue falling right back to the level of before the boom - in real terms though that would represent a huge fall. East London Line extension might push prices in the area up a bit though.

It's really not a bad block, it's just ugly from the outside.

Oh, and huntersc - £300 a month on food and £200 on entertainment? Are you new to MSE or what? Try £30 and £20