NI Co-Ownership Housing Scheme - I need out!

saverbuyer

I have to apologise - I composed that post on my phone this morning. The grammar and spelling are awful making it difficult to read.

I stand by the points I was making – The market is still functioning for realistic sellers and buyers.

You can get a mortgage with a good deposit.

There’s no need to bail out sellers who purchased during the last 7 – 10 years by taking on their mortgage debt and buying at inflated prices.

The only thing happening now is lower levels of sales and much lower prices.

We will not see 2007 prices for decades. For those in negative equity the only solution is to pay down your mortgage aggressively while interest rates are at the lowest levels in history. Those who decide to rent their negative equity house out and buy somewhere else all I can say is this “the answer to a large amount of unserviceable debt is not more debt”.

A.L.D.A

saverbuyer wrote: »

This quite frankly is misleading. The problem with the housing market her is NOT the lack of available finance but still unrealistic prices from the resell market. Houses ARE selling at the right price and to people who can save DEPOSITS. Just so you know DEPOSITS are a means for a bank to see that you can organises you financial affairs and can AFFORD what could be the most expensive purchase of your life. There is no major shortage of house in NI. It has been reposted today there are 5000 ghost house here which need to be finished by developers (approx the size of Cookstown) and also 60000 vacant houses.

There is no evidence to suggest the market is bottoming out.

Please this person could be in this situation because they rushed in during the boom. Do not give inaccurate and misleading advice which could potentially cause further hardship for them or others.

There is a housing shortage in NI ask any Housing Association. More people are renting and are paying around £600 a month to rent.

What you are seeing is people buying where they see the potential for profit. I have clients who are buying cash for rental and in the hope of future gain. For many cheaper houses rental returns are now making sense. An increasing percentage of sales are cash sales!!!

One of the problems IS lack of mortgages!!! Look at YoY mortgage approvals. We have gone from one extreme to the other. If I remember correctly the Governor of the Bank of England did recently mention that the average deposit in the UK was over 30%! When I bought my house 10% was norm. (and fair) I think mortgage situation will gradually improve in the coming year.

Regarding vacant houses, I once did research on that issue, there are many legitimate reasons for houses to be vacant. It is not the pot of available houses that some think. People in hospital, short term overseas contract, armed forces, elderly in care, caught up in the Planning process etc etc. Then there are those in total disrepair.

A fair price for a house is the cost of construction, service connections, finance costs, cost of land plus reasonable profit. When the purchase price drops below the cost to build people do not build. Perhaps this is part of the reason there is 5000 ghost houses. This of course is a drop in the ocean. Have you any idea how many additional houses per year we need in NI? Could you hassard a guess what the year on year short fall is? Any idea how large the budget is for social housing?

I think the market is bottoming out, you think otherwise. I can see your reasons for thinking as you do. We will see as we run through 2012 and into 2013. I take my position as someone who advised not to buy in the years of madness, and I don't believe expensive houses are good for the economy or that they should be treated as a investment.

Mind you I don't predict any mad recovery in prices. I think prices will struggle to keep place with inflation for a year or so, once the economy starts top stabilise supply side of the equation is going to be a problem as is the availability of development land.

A.L.D.A

tara747 wrote: »

2. Lack of demand - buyers are pretty sure that prices are going to keep falling and don't want to end up in instant negative equity. This is the case with OH and I - we have a huge deposit but are unwilling to pay inflated prices, and are convinced that house prices are going to keep falling. So far, we have been right and houses can only get cheaper (see article): http://www.bbc.co.uk/news/uk-northern-ireland-14377692

3. Lack of finance for those few who do want to buy. This is mainly due to lack of deposits and, as long as people fail to save a deposit, this situation will not improve. I agree 100% with saverbuyer's post below, especially the highlighted bit. I hope that the banks never return to irresponsible lending - that's what got people like the OP into this mess. The lower house prices go, the better imho.

Taking 3 first. I think 10% is a reasonable deposit to expect. What is happening is people see a house say £120,00 and have £12,000 - £15,000 Put in offer and find the house is then valued at £100,000 plus there is a list of repairs. They then can't buy as they would need over £30,000 or the person selling to drop £20,000. If the people are currently renting their rental costs are likely to be similar to the cost of the mortgage.

I have no desire to see house prices return to 2007 levels, that was madness. However we are not building anything like enough houses each year and we are heading into the 4th year of this. Somewhere down the line that will cause problems.

Markets behave like herds, 2006 the herd was for buying now caution rightly prevails. NI once had the cheapest houses in the UK, it saddens me to see how that changed, but I genuinely believe we are heading for a serious problem in the medium term. If you have a population that is increasing and you don't build what happens! We need to get house construction moving again at a reasonable level in order to prevent future shortages and we need adequate land to build on. That will ensure that house prices stay down.

ballyblack

we need adequate land to build on

Agricultural land is getting more expensive right now and will eventually raise the price of building land

joefizz

ballyblack wrote: »

Agricultural land is getting more expensive right now and will eventually raise the price of building land

Isnt it the other way round? Agricultural land is at an all time high because developers were paying up to a million an acre for zoned land so they thought raising the agricultural price from 3.5 k to 12k an acre was a good bet in case some of it ever got rezoned? Buy 100 acres and if 1 gets rezoned you are level, 2 you are in profit.

Ive been looking at buying agricultural land for 18 months now but the price per acre is unsustainable compared to the yield and any possible rent - sound familiar?

Oh and read the latest nama report for the amount of agricultural land held by developers...

A.L.D.A

joefizz wrote: »

Isnt it the other way round? Agricultural land is at an all time high because developers were paying up to a million an acre for zoned land so they thought raising the agricultural price from 3.5 k to 12k an acre was a good bet in case some of it ever got rezoned? Buy 100 acres and if 1 gets rezoned you are level, 2 you are in profit.

Ive been looking at buying agricultural land for 18 months now but the price per acre is unsustainable compared to the yield and any possible rent - sound familiar?

Oh and read the latest nama report for the amount of agricultural land held by developers...

Most Agricultural land will never be re-zoned, so for most land price has nothing to do with development. Land in NI has tended to be expensive, I could never understand why. How many beasts can you graze on an acre? Many farmers could sell up here and buy a much larger holding in warmer parts.

NI needs a coherent housing policy, because we limit the land we can build on we reduce the supply and send the price rocketing. It was one of the reasons why house prices soared and also a reason why so many were building in their back gardens etc. There is a down side to letting it rip but we need a better balance than we have at the minute and we need to allow more imagination and freedom.

I would like to see self build schemes and encouraging people to set up COOPs to build their own.

There was a good programme on Channel 4 last Friday called 'The secret Life of Buildings' ( I think) It should be available on line to view. It is well worth watching. I would highly recommend it.

joefizz

A.L.D.A wrote: »

Most Agricultural land will never be re-zoned,

I bow to your superior knowledge Alan!
I must be mistaking the politicians here for someone else and I must not be sitting in a house built on rezoned agricultural land!

I thought planning was to avoid rezoning 'good quality' agricultural land, not just any land, so you are correct on that.
Land in and around current developments and urban areas is prime for rezoning and that was my point.

A.L.D.A

joefizz wrote: »

I bow to your superior knowledge Alan!
I must be mistaking the politicians here for someone else and I must not be sitting in a house built on rezoned agricultural land!

I thought planning was to avoid rezoning 'good quality' agricultural land, not just any land, so you are correct on that.
Land in and around current developments and urban areas is prime for rezoning and that was my point.

Joe I think we probably have the same opinion of some politicians and their friends. Set them aside, in the overall scheme they are an annoying distraction. Remember Lord Rooker's decision on rural sites and the idea that we should build 60% of all new housing on Brown field sites in Belfast. Rural sites doubled in value and the Belfast garden grab went into over drive.

Land is zoned in local area plans, but often that sort of policy favours large developers, who often buy and lobby well ahead of rezoning. I think we need to break that dominance.

I totally agree that rezoning good agricultural land is practically a sin, but there is a lot of poor land that is of little use. It is a big subject but IMO we are not creating the opportunities for people and we are way over regulated and the supply end is over restricted.

I have seen quite a few good sites going for what I consider reasonable prices. £25,000 a house Ballygowan area to take an example. In Newtownabbey one for under £20,000 per house. Unfortunately ordinary people cannot buy these (repos) as they are often for 20 - 30 houses. I have absolutely no doubt that the people who bought these sites will make money. That is why I think it is a shame that there is no means by which groups of people can cooperate.

ballyblack

because developers were paying up to a million an acre for zoned land

Update today 3rd August 2011

NO! they are not!

joefizz

ballyblack wrote: »

Update today 3rd August 2011

NO! they are not!

Indeed.
Hence the use of the word 'were', please do keep up ;-)

It certainly is a big issue allright and will take years for it all to pan out when nama and the equivalents try to offload what they have.

Its already happening to a certain extent in areas of the US but I drove through areas last month that have just been abandonded. Only abandonded a year with no maintenance and nature has taken its toll.
I know people down south who had already bought houses in ghost estates and if the negative equity wasnt enough, being next door to an empty house during last years bad winter was horrific.

Its this type of thing that the govts should move in for social housing, finish them off to a reasonable standard and then start getting rents for them and tell the developers to go sing.
Thats of course in an ideal world and never likely to happen.