Negative Equity

westlothian

BitterAndTwisted wrote: »

Fourteen grand's worth of negative equity plus selling commission to the agent, legal charges and removal costs? I'd say that would mean being stuck in the medium-term unless there's a lottery win.

True, we have decided to overpay the mortgage by £200 a month anyway and if we are lucky enough to conceive I am sure baby number 1 will be just fine. Guess we will get the garden etc eventually!

Stevo10

We're in a very similar position with my flat. I bought a fairly new 2 bed flat in August 2006 for £106k in West Lothian, the rest of 2006 they kept selling for more and more and probably peaked around £120k. Again its 9 flats in a block and all very similar, except decor. There is a total of approx 190 flats.

In the last few years they have been going up for sale and are being advertised at £85k-£95k, so we have suffered a similar drop in value and it looks consistent. Luckily I had a fair size depost and have overpaid a bit in the last couple of years so don't have negative equity (just). But it looks like a lot of us who bought flats around this time have lost a fair chunk on property value.

It probably also doesn't help that the 'target market' for the property (FTB's) will also have their heads turned by new build shared equity incentives where very little deposit is required and they probably end up woth a small house for the same size mortgage.

Like others have suggested best thing is to try and overpay so that the current sale values will clear the mortgage.

westlothian

Stevo10 wrote: »

We're in a very similar position with my flat. I bought a fairly new 2 bed flat in August 2006 for £106k in West Lothian, the rest of 2006 they kept selling for more and more and probably peaked around £120k. Again its 9 flats in a block and all very similar, except decor. There is a total of approx 190 flats.

In the last few years they have been going up for sale and are being advertised at £85k-£95k, so we have suffered a similar drop in value and it looks consistent. Luckily I had a fair size depost and have overpaid a bit in the last couple of years so don't have negative equity (just). But it looks like a lot of us who bought flats around this time have lost a fair chunk on property value.

It probably also doesn't help that the 'target market' for the property (FTB's) will also have their heads turned by new build shared equity incentives where very little deposit is required and they probably end up woth a small house for the same size mortgage.

Like others have suggested best thing is to try and overpay so that the current sale values will clear the mortgage.

That is our plan I think. I am currently renting in Wester Inch Village but have just offered my notice and will move in with my partner. Thankfully mortgage rates are pretty decent at the moment so my partner is able to make a bit of a dent with overpayments.

westlothian

My partner has had a rather frank discussion with EA today. The EA has said that price is clearly the issue given the other prices dropping by so much in the development. The flat is now off the market.

socistep

Its very frustrating, there are probably thousands of us who were in a position to buy around the peak who are left with potential negative equity or losing money, just because house prices had risen so much at that point - personally I feel very aggrieved by it.

I've always been very sensible with money, after uni I paid off all my credit card debts and student loan and saved 10k for a deposit, that took me to 2007, I then wanted to buy my first property and purchased a nice flat in a canal side location which was more then affordable for me on my salary.

I bought that for 135k, fast forward 5 years and its now on the market for 129k and EA have said to expect 125k if there is any interest (especially given stamp duty threshold), outstanding balance on mortgage is 113 so if I'm lucky I will get 10k back and write off the rest.

However my situation is better then yours, 2.5 years ago I moved in with my partner and rented the flat out, it doesn't cover the outgoings but currently means I pay £150ish per month on the flat - I tried to remortgage which would have made things better however the valuation report put a stop to that so pretty much stuck on the deal I'm on currently.

The 2 options I have are

- Sell at a reduced price if there is any interest, I'm pessismistic of the chances really
- Keep renting out and accept money is tied up in the flat, hope that mortgage and house price situation gets better.

GDB2222

When you say that you feel aggrieved, with whom?

pinkshoes

socistep wrote: »

Its very frustrating, there are probably thousands of us who were in a position to buy around the peak who are left with potential negative equity or losing money, just because house prices had risen so much at that point - personally I feel very aggrieved by it.

House prices go up and down, so no need to feel aggrieved really...

I also bought a new build flat at the peak, and have just sold it for a 4.5% loss. Not bad considering the other area we contemplated buying in saw a 20% drop in prices!!

On the plus side, comparing interest on a mortgage and buying/selling fees vs renting, I broke even, and best of all, I got to live in my own home, which was wonderful!

carslet

the problem was that some people thought house prices would just keep on rising forever, and this could not happen or it would mean eventually no one could ever buy a home again ever, house prices in most of the country are down 20% and personally i think they will fall another 20% over the next 5 years,

DannyboyMidlands

And what is there to feel aggrieved about?

If you sell for £125k then you'll have spent £10k over 5 years (£2k per year, £160 per month) on somewhere to live. Where's the problem? What money have you lost? Do you expect to live for free?

GDB2222

DannyboyMidlands wrote: »

And what is there to feel aggrieved about?

If you sell for £125k then you'll have spent £10k over 5 years (£2k per year, £160 per month) on somewhere to live. Where's the problem? What money have you lost? Do you expect to live for free?

Also paid the mortgage.