Buying a new build flat for buy-to-let - lender valuation has come back really low

Fire_Fox

brit1234 wrote: »

He was one of a legion of buy to let investors who priced out first time buyers or forced them to over extend. If you chose to treat property as a gamble to get rich quick rather than what we want to call a home then prepare to be burned.

How is buying a flat you want to keep for ten years (see post 1) a gamble to get rich quick? Nobody has forced first-time buyers to overextend, that is an individual choice. Few people have to live in London, nor do you have to live in the best areas. Nobody forced my own brother and his partner to FTB a small, overpriced flat in Wimbledon and end up in negative equity as a result.

It seems to me that the OP has completely failed to do his homework, but has at least sought advice at this late stage. I think he has been foolish but I don't feel the need to crow about it. I don't understand why investing your capital in a decent savings accounts or gilts or bonds is viewed as sensible, but investing in property makes you the scum of the earth?

Not all buy-to-let landlords are greedy, many are ordinary folks planning for the retirement. My parents owed a modest second property for many years (in olympic Stratford!): they lived frugally to save the deposit, paid their income and capital gains tax, and treated their tenants fairly. My father retired in his 50s as a result of that and AVCs.

My own home was purchased with the money from my divorce - in Bradford because that's where I could afford! As I was on Incapacity Benefit at the time I chose to rent a single room in a shared house and let my two bedroom flat so I'd have a little extra income.

Of my family who are the greedy ones? My parents planning for their retirement over a twenty year period? Or my sibling who wanted to live in a smart area and lost the gamble? Perhaps me looking for a little extra income when too ill to work myself?

AMILLIONDOLLARS

Fire_Fox wrote: »

How is buying a flat you want to keep for ten years (see post 1) a gamble to get rich quick? Nobody has forced first-time buyers to overextend, that is an individual choice. Few people have to live in London, nor do you have to live in the best areas. Nobody forced my own brother and his partner to FTB a small, overpriced flat in Wimbledon and end up in negative equity as a result. The reason why they had to buy an overpriced flat in the first place was down to investors pushing up the price!.

It seems to me that the OP has completely failed to do his homework, but has at least sought advice at this late stage. I think he has been foolish but I don't feel the need to crow about it. I don't understand why investing your capital (it wasn't his capital he wanted to use but most of the bank's) in a decent savings accounts or gilts or bonds is viewed as sensible, but investing in property makes you the scum of the earth?

Not all buy-to-let landlords are greedy, many are ordinary folks planning for the retirement. My parents owed a modest second property for many years (in olympic Stratford!): they lived frugally to save He's trying to borrow £270k this is sheer madness, your parents had the right attitude the deposit, paid their income and capital gains tax, and treated their tenants fairly. My father retired in his 50s as a result of that and AVCs.

My own home was purchased with the money from my divorce - in Bradford because that's where I could afford! Its obvious the OP cannot afford this flat without some heavy finance, there by living beyond his means As I was on Incapacity Benefit at the time I chose to rent a single room in a shared house and let my two bedroom flat so I'd have a little extra income.

Of my family who are the greedy ones? No they were victims of the system and the greed of the OP My parents planning for their retirement over a twenty year period? Or my sibling who wanted to live in a smart area and lost the gamble? Perhaps me looking for a little extra income when too ill to work myself?

Your parents had their head screwed on, they didn't go the quick rich route to success, I wish your family all the best for the future, at least they are trying to make the best of a bad situation and not trying to find a quick fix out!!

AMD

Fire_Fox

AMILLIONDOLLARS wrote: »

Your parents had their head screwed on, they didn't go the quick rich route to success, I wish your family all the best for the future, at least they are trying to make the best of a bad situation and not trying to find a quick fix out!!

AMD

My brother bought an overpriced flat because he bought in desirable Wimbledon. They could comfortably have afforded to buy in Stratford, which we knew well and knew would make them a profit enabling them to buy a family home later on.

I wasn't able to afford even a shoebox where I lived before moving north - Cambridge. It's not the BTL market that's the problem, it's the fact that far too many well educated people with good salarys want to live in the area and commute to London or send their kids to the 'right' schools. In Bradford there is (or was!) a thriving BTL market - yet I can afford to have purchased outright here.

Virtually everyone who buys property - whether BTL or as a home - uses the banks money for the main body. The OP has already put down a substantial deposit of (presumably) his own money. Do you think all those flats in Woolwich would be built if it wasn't for the BTL market? There is no BTL market if there is no rental market.

I agree the price the OP was willing to pay was far too high, as noted before he didn't do his homework. But both my parents and I have owned homes rented out to others - mine purchased as a safe haven for my capital, my parents specifically as a BTL. Is it OK for us to have done this and not the OP? Or are we evil greedy landlords that deserve to go broke?

Gorgeous_George

westv wrote: »

That's a bungalow.

There's no flies on you.

:rotfl:

GG

Snooze

adusad wrote: »

Thanks for the advice - I still can't believe that they have valued it 42% below what it was on at a couple of years ago.
I am going to check the paperwork as to when the actually said it would be ready then - though I think it was Q1 2009, so they are not too late.
The development is essentially complete, just a last few communal areas to finish off - though other buildings nearby are not complete.
Has anyone managed to renegotiate with developers in this way before - what's the best way of going about it? I have spoken to them once a few weeks ago, but that was before the valuation came back yesterday... any hints / tips appreciated...

If it did say by the end of Q1 2009 then they are 1 month late. Q1 ended on 31 March.

Rob

AMILLIONDOLLARS

Snooze wrote: »

If it did say by the end of Q1 2009 then they are 1 month late. Q1 ended on 31 March.

Rob

Adusad said:

"Also, their claim that the valuation is low because of the development not being complete - well it will be when I am able to complete next month - so I just don't understand that?!!??!

and

"The development is essentially complete, just a last few communal areas to finish off - though other buildings nearby are not complete".

So his flat is ready, but he is not.

As I have stated before this is a 10 year development, so there is a lot of buiding work yet to be complete

AMD

Snooze

AMILLIONDOLLARS wrote: »

"The development is essentially complete, just a last few communal areas to finish off - though other buildings nearby are not complete".

So his flat is ready, but he is not.

Umm no. Nearly 1 whole month after the planned completion date the flat is only "essentially complete", therefore it is not complete, is it? :rolleyes:

It doesn't matter how you twist and interpret the wording, it isn't complete, period.

Rob

Edit to add: Noticed it does say 'development' and not 'flat' so disregard the above. As the OP hasn't said whether the flat was complete and ready to move in to at the end of March then it's impossible to advise on it now.

Entertainer

I've seen new builds in Thamesmead which have fallen by 55% and still wont sell. So 42% sounds reasonable.

You have my sympathy Adusad but I'm afraid you have been the (willing?) victim of the biggest ponzi scheme in all of human history.