House Price Crash Discussion Thread

Frags

Hi guys, after reading this thread i am slightly freaking out. I am just about to buy a property on a shared equity scheme, off plans with affordable housing scheme. Basically the market value of the property is 92.5 k andi will have a 67% stake int his property with a mortgage of £61K, no dep required and this is a repayment mortgage. My main fear is if prices crash and i am left in negative equity, i am quite new and nieve to all this being a first time buyer, i have seeked advice froom lots of people but am feel if i dont egt onto the property ladder now then i never will. Also this seemed to be relatively risk free way of doing it, when i come to sell i will get 67% of the equity, or obviously 67% of the negative equity if prices drop. Does buying off plans reduce this risk as you are getting the property at a cheaper price?

pamaris

Frags wrote: »

Hi guys, after reading this thread i am slightly freaking out. I am just about to buy a property on a shared equity scheme, off plans with affordable housing scheme. Basically the market value of the property is 92.5 k andi will have a 67% stake int his property with a mortgage of £61K, no dep required and this is a repayment mortgage. My main fear is if prices crash and i am left in negative equity, i am quite new and nieve to all this being a first time buyer, i have seeked advice froom lots of people but am feel if i dont egt onto the property ladder now then i never will. Also this seemed to be relatively risk free way of doing it, when i come to sell i will get 67% of the equity, or obviously 67% of the negative equity if prices drop. Does buying off plans reduce this risk as you are getting the property at a cheaper price?

You should start a new topic on this, as there are possible pitfalls with shared ownership that more experienced members (who may not be reading this sticky) can fill you in on. It isn't "risk free" in any case.

Frags

Its shared equity not shared ownership, they are not the same scheme, you pay half mortgage half rent with shared owner ship, this is just a percentage of the maeket value of the property at the time you buy it. Thanks for the tip will start a topic on this one

mystic_trev

Commenting on the CML's figures, Adam Sampson, head of housing charity Shelter, said: "These figures will no doubt set alarm bells ringing for hundreds of thousands of homeowners across the country".

http://news.bbc.co.uk/1/hi/business/7067170.stm

Pobby

mystic_trev wrote: »

http://news.bbc.co.uk/1/hi/business/7067170.stm

Not only that,we are now told that repos on houses could increase by 50% next year,that`s 45,000.

By way of interest,I supply a network of independent retailers.My overall business is well down on 3 years ago as is my customers.Goodness knows where this is going to end up!!!!!!!!!!!

HugoSP

Pobby wrote: »

Not only that,we are now told that repos on houses could increase by 50% next year,that`s 45,000.

By way of interest,I supply a network of independent retailers.My overall business is well down on 3 years ago as is my customers.Goodness knows where this is going to end up!!!!!!!!!!!

I don't know what market or goods you supply but this could be due to a number of factors, not least the continuing demise of independent retailers supplying some markets, which some say is largely unaffected by economic fluctuations.

I do note however that Focus are closing 3 branches, Liskeard, Redruth and Bodmin. Either they've finally twigged that they can't compete with Trago Mills, or it may be symptomatic of a downturn in their fortunes, as they are inked to the housing market.

Pobby

Interestingly my portfolio of goods covers various bases.All electronic covering sound and lighting in the main.The market was very bouyant a few years back but most customers are reporting a down turn.

Looking at the companies house reports,even the bigger players are appearing to suffer.

I guess like many markets,so many new players have come on the scene over the last number of years and indeed some existing customers have expanded.My take is that we are in an ``over shoot`` situation with too many people chasing to few customers.

This harks back to the end of the 80`s when the last ``market correction`` happened.

Although I enjoyed good profits a while back,I had a nasty feeling that much of the demand was funded by borrowed money.That sneaky worry is sadly looking like that was the case.

Johny_T

Do we think it is a good time to sell now?

I was planning on getting a house with my missus so mines been on the market for 6 months without a sniff. After a change of estate agents viewings seem to be happening. Ironically the missus has decided that she quite likes the independence of her little flat in the city centre!

The market is suggesting that I woudl make a tidy profit on the house plus I coudl rent a flat at a more suitable size for quite a bit less than the mortgage. Clear some other debts and potentially still have a decent deposit in a few years when we both want to move out of the city.

Whats the thoughts?

movilogo

Negative equity warning for first-time buyers as repossessions set 'to jump 75%'

source:
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=490514&in_page_id=1770

Looks like downturn is just on the bay. :j

WTF?_2

Johny_T wrote: »

Do we think it is a good time to sell now?

I was planning on getting a house with my missus so mines been on the market for 6 months without a sniff. After a change of estate agents viewings seem to be happening. Ironically the missus has decided that she quite likes the independence of her little flat in the city centre!

The market is suggesting that I woudl make a tidy profit on the house plus I coudl rent a flat at a more suitable size for quite a bit less than the mortgage. Clear some other debts and potentially still have a decent deposit in a few years when we both want to move out of the city.

Whats the thoughts?

Now would seem to be the top of the market cycle so if you have a property as an investment/not as a home it's an excellent time to sell up and get equity out before prices really plummet.

It looks like you missed out on the very top when you could easily sell for max price so be prepared to take a 5-10% hit (assuming you have the equity) if necessary to get out now before you end up chasing the market down.

Take the money and stick it in a high interest savings account with a reputable bank - the interest alone should go some way towards paying rental costs whilst you wait.