It’s such a bitter taste of defeat as I stare out my window each morning

PasturesNew

Some flats round the corner from me turned up in RM reduced from £360k to £295k. Loads of flats ... empty ... forlorn. That one's in a whole road of flats that were built (up to £1.5million), all were Victorian places before, now all shiny flats, topped with a "penthouse".

Overpriced, not in short supply. Empty, overpriced .... and everywhere.

dopester

The market’s collapse is the worst thing that has happened many young people of my generation.

Many young people, and older people too, but not all, as she herself admits (below). The ones out on the lash almost every night, and spending much of their time discussing and worshipping at the media temple of consumerism, lapping up how house prices only ever go up exponentially year after year.. many of those types have consequences for buying.

Others who were not drawn in during the boom (perhaps through education, doubt, research and fear), and a new generation who might have been, could now have a future where they are saved from being slaves to hideous amounts of debt.

A prison, I soon learned, that had no more than about 10 inmates. Today the other apartments in my building are filled to the brim with wise renters.

kabayiri

Presumably the lady was happy with the price she paid at the time.

I know it's hard, but she should remember this, and try and dig in for the long haul back to recovery. Her flat doesn't become a bad flat overnight.

iinvestor

she is financially uneducated and had NO PATIENCE, she bought After the recession had already started; how dumb can you get!

At the end of the day she still has a property to live in, if she can meet the repayments then their is no problem. It will take 10 to 15 years for her to break even.

mostlycheerful

“I bought…for…€525,000…I have…a balcony and a roof garden, extras for which I paid…€295,000.”

So ones without the balcony and roof garden were €525,000 - €295,000 = €230,000.

“…are being offered…for…€190,000.”

So they’ve gone down €40,000. Yeah, so what?

So in the same ratio that means that your one is currently worth €433,695. So if you had to sell now then you’d be down €91,305 – but you’re not trying to sell, are you, you’re living in it and enjoying your balcony and roof garden and view, aren’t you. So don’t complain, you’re living on top of the world in a palace!

And if you just wait a few years till property comes up again, as it always has done historically, then you’ll have no loss in value and if you wait another few years you’ll be quids in when property booms again and prices for desirable properties go through the roof again.

If these figures are correct then it would appear that the article is slanted and exaggerated and misleading.

It would appear that actually she has little to be unhappy about, she’s in the top rank of rich people to live in a lovely place like that. As long as she doesn’t lose her job, assuming that she's got one and isn't just using her parents for all the bills, she’ll be able to continue to afford to pay her outgoings that she chose to take on.

And if you can’t afford to pay your outgoings, well just do the normal thing that millions of people do and get a lodger or two in or move out and rent the whole place to tenants - and if you want to get top dollar then do a company let or find someone rich who’s fallen in love with the area and your roof garden and doesn’t care about the price.

“My father reminds me on a daily basis that I ploughed in head first and listened to no one.”

I believe that bit, yes, there’s a lot of people who fail to take advice about big serious things that they know little or nothing about such as buying a very expensive property with a sizable level of outgoings necessary to maintain it.

“…has only compounded my negative equity nightmare…as a homeowner, my load was already heavy enough to carry as, stuck with a property I cannot sell, I struggle to meet my monthly repayments...with help from my parents, I bought..."

So she had help from her parents, and the article doesn't say how much she owes on her mortgage. If she's in negative equity then that suggests that her mortgage may be for more than €433,695 if the above analysis of the figures is correct except that perhaps the help from the parents makes the mortgage figure significantly lower than this. So maybe she only has a relatively small mortgage to service. Or nevertheless still a whopper, despite the parental help. It would be relevant to this article to know which.

Maybe the woman herself and or the original journalist would care to comment if the interest here on MSE comes to their attention. Yes, that could be interesting. Maybe there's more to this story than meets the eye. And maybe they can rebut what I've said here in which case, apologies in advance if in fact I'm wide of the mark with my interpretation of what the article appears to say on the face of it.

dopester

mostlycheerful wrote: »

Maybe the woman herself and or the original journalist would care to comment if the interest here on MSE comes to their attention. Yes, that could be interesting. Maybe there's more to this story than meets the eye. And maybe they can rebut what I've said here in which case, apologies in advance if in fact I'm wide of the mark with my interpretation of what the article appears to sayon the face of it.

50 years of rising values in the west and you think it'll be like that for eternity don't you mostly.

As I understand it, the woman herself is a professional journalist....(links below garnered from the hpc thread on this).

http://www.independent.ie/national-news/on-just-euro196-a-week-it-hurts-to-part-with-the-pennies-2271802.html

Like you point out, she bought after prices had softened, in the full belief it was good value. Probably her benchmark being even more extreme asking prices of the year before. She made her decision to buy in 2008, probably very happy she was paying less than some 2007 sucker - now pay back what you committed to and owe Alison.

Here is one of her pieces from last year, getting more news-copy from her real life decision to offer readers.

http://www.independent.ie/lifestyle/trapped-in-a-negative-equity-nightmare-after-dreams-of-city-apartment-living-turned-sour-1794601.html

Loughton_Monkey

Whilst I am not totally unsympathetic to the girl, I find it rather perverse that she is earning loads of money as a 'journalist' - mainly, it seems, reporting about herself.

She entered into a contract, which apparently she could afford, and it's not as if her mortgage costs have gone up (she's fixed). So with hindsight, she made two 'mistakes'. Buying it at the wrong time, and buying the wrong type of mortgage.

What she doesn't seem to recognise is that virtually all homeowners have suffered - many a lot more. Someone much older, in, say, a £600,000 house (2007) has 'lost' rather more than her.

"But your mortgage is tiny.... you're not in negative equity....." she would probably say. But the older person has actually lost a lot more Euro notes than her. She is forgetting that the older person struggled just as much (if not more) to pay the mortgage, and for a hell of a lot more years. She is forgetting that over the next 25 years, she will make just as much profit from housing as the older person. Just a difference in timing.

[You bought a diamond ring for £100, 20 years ago. Now worth £5,000 and it was stolen. I just bought one last year for £5,000 and it was stolen. Therefore I need more sympathy than you?]

"But what if I want to move?" She will say. In that case, she will have to take her 'hit' and move on. The older person (she won't realise) had planned to move into rented accommodation and live off the house proceeds. Now 30% (or whatever) deflated income for the rest of his life.

So either we 'sympathise' with all house owners. Or, as most of us do, let's moan about it. But somehow I cannot feel life has dealt her any harder blow than anyone else - or if it has, then it's because of her own naivety.

PasturesNew

She needs a penpal. I could suggest Liz Jones maybe. They can whine together.

Sibley

I think she sounds like a bitter and twisted little spoilt brat.

Her property is the type that would be vulnerable now. High end new build apartment. They built some in Maidstone overlooking the river Medway. I fancied one myself.

At the end of the day her mum and dad have money by the sounds of it. It's not exactly a life threatening situation.

If I was in her situation I wouldn't be loosing sleep. Rent it out and wait until prices go up or live in it herself. It looks like a nice pad. No point thinking about what somebody else paid or has. Being a nice place it will aways be sought after.

Shes had a better start than most people.

mostlycheerful

Dopester : “50 years of rising values in the west and you think it'll be like that for eternity don't you mostly”

No, they may stay down forever, and go a lot lower. But if so then that will be the first time that’s ever happened historically. So it’s reasonable to assume that they’ll probably come back up again sooner or later. Whether that will be in the next 5, 10, 20 or 50 years is what no one can say. But, yes, they might not, they could stay down indefinitely, anything’s possible.

Thanks for the links to the other articles. Although they don’t particularly clarify or explain the points I’ve highlighted about what the figures and info in the first article may appear to suggest in isolation they do nevertheless explain more about why she’s saying that she’s feeling despairing.

Yes, I didn’t know or notice that she’s a journalist so that helps explain it. It wouldn’t make good copy to say that she’s enjoying her lovely €525,000 place in the middle of the recession when so many other people and poorer people are suffering. No, person having a hard time is probably the only sensible twist to put on it in order to make an acceptable story at the moment.

From the other articles :

“I will have 480 repayment instalments over the next 40 years; it really is an imprisonment of sorts.”

Well, she could have chosen 25 years instead and got a cheaper place rather than maxing out. However, they do 100 year mortgages in Switzerland and the Japanese recently briefly offered 100 year mortgages (then withdrew them) and they do 50 year mortgages in America so 40 years is not the most that some people do. But, yes, 40 years is quite a killer term to try to get used to. Scary. Yes, understandable if she’s now feeling bad about it.

“I ignored repeated warnings both from my parents and the Central Bank and instead ploughed in head first and handed over the money…There would have been a lot let over in the kitty, let's say, for a more luxurious pad if I hadn't been so hasty.”

Yes, realising that you’ve made a mistake like that would make you disappointed.

Yeah, these other articles and the fact that she’s a hack explain why she’s saying she’s sore in ways that the first article doesn’t appear to do convincingly on its own. So thanks again dopester.