‘Super-prime property’ could be the canary in the coalmine

cells

IronWolf wrote: »

I wish I could buy somewhere in Chelsea, but prices would have to crash maybe 80% before I could afford somewhere lol.

It's a nice area, but I do wonder why people live there in a £5m flat, when that same money will get you so much more just outside London.

Its not that absurd, eg i just did a rightmove search for Kensington and you get for £4.95m

http://www.rightmove.co.uk/property-for-sale/property-50110883.html

Look at the floor map, its a 370 sqm home. Thats about 5x the size of a typical home


They aint paying £5m for a normal home

Also that £5m buys you distance from poor people which has a premium up and down the country (just look at how similar sized homes in a council estate sell for a good discount vs the same type of house away from council homes.

Likewise in most cities and towns there are the "good bits" which for the same size home sell for a premium

padington

It all hangs on the election. If labour wins power, property owners will be holding or downsizing or moving elsewhere. if the tories win property owners will be holding and upsizing with inward economic migration.

We just have to wait and see.

Killerseven

Remember you never really own property even when the mortgage has been paid off. There are these stories in the past where people who have paid off their mortgages have found to their horror that a conman has sold their house to new people and done a runner with the money, the new owners turn up to move into their new house find it's already occupied but because they are now the legitimate owners the actual real owners are kicked out penniless into the street.
More scary than is these credit default swap orders or what ever other names have been made for these derivatives. They take a load of mortgages and 'sell' them in a big package to lots of others entities. If the buyer who lives in the house can not pay the mortgage payments when interest rates go back up to more normal levels, THEN WHO OWNS THE HOUSE WHEN IT GETS REPOSSESSED? The banks who sold the derivatives of mortgages have all the profit without the risk.

Marktheshark

Leaseholds are the toxic debt, many hold leaseholds for flats which will requite extensive renovation costs and in blocks built out of materials that will need to be demolished long before the lease expires.

padington

Marktheshark wrote: »

Leaseholds are the toxic debt, many hold leaseholds for flats which will requite extensive renovation costs and in blocks built out of materials that will need to be demolished long before the lease expires.

Leaseholds will also be Less attractive if our life expectancy ever dramatically increases because of new technology.

Suddenly a 81 year lease looks a bit crap if you're expecting to live until you're 120.

The freehold properties will creep up in popularity even more than they are, I'm sure of it

cells

padington wrote: »

Leaseholds will also be Less attractive if our life expectancy ever dramatically increases because of new technology.

Suddenly a 81 year lease looks a bit crap if you're expecting to live until you're 120.

The freehold properties will creep up in popularity even more than they are, I'm sure of it

It costs little to extend a 81 year lease to a 200 year lease

As far as I know leaseholders can extend leases over and over again, so long as the remaining term isnt below 80 years the cost is low

Lease holds are not so much a long term rental, but a way to get communal buildings maintained

padington

cells wrote: »

It costs little to extend a 81 year lease to a 200 year lease

As far as I know leaseholders can extend leases over and over again, so long as the remaining term isnt below 80 years the cost is low

Lease holds are not so much a long term rental, but a way to get communal buildings maintained

Isn't it low because people tend not to live much beyond 80 ?

cells

padington wrote: »

Isn't the low because people tend not to live much beyond 80 ?

..............what?

padington

cells wrote: »

..............what?

The cost of renewing a lease is based on market prices.

If people lived longer, they would cost more to renew.

no ?

Or would the market adjust to a longer life and the Magic number would move from '80' to '120' at no extra cost ?

http://www.moneysavingexpert.com/mortgages/extend-your-lease