HTB - It's started

mayonnaise

Misleading thread title as nothing to do with HTB.

OP, please amend thread title from: 'HTB, It's started'
to: 'New builds tend to lose value'

thanks

tberry6686

When it comes to house prices, Aberdeen is a pretty unique area in that it is hugely dependant on the oil and gas industry for both jobs and support of decent wages/salaries in the other industries in the area.

The effects of the downturn cannot be overstated when it comes to Aberdeen. I work in the industry and the amount of (Well paid) jobs that have been lost and are unlikely to return is huge. In most of the oil companies around 50% of office jobs have gone. These were the jobs that propped up house prices in the area (a large percentage of the offshore staff don't live in the area) and as such house prices dived as people were forced to sell up.

Now that the oil industry is picking up again the prices are starting to increase again (slowly) but the jobs that are becoming available now are on much lower salaries than before (it's common for salaries to be 20% lower than those on offer 5 years ago)

This pair bought an overpriced flat at pretty much the peak of the market when all the warning signs of a local price crash were obvious.

Now they find they can't afford to move. That's what happens when you ignore big flashing warning signs and think that you know better than everyone else.

Graham_Devon

Pixie5740 wrote: »

Charles and Jessica also appear to have a beef about the factoring fees. No doubt those won't be helping with the value of their flat either.

https://www.pressandjournal.co.uk/fp/news/aberdeenshire/1535916/north-east-couple-claim-factoring-costs-hike-is-pushing-them-into-bankruptcy/

They are more likely to have some success here, as this sort of thing is being cracked down on at the moment.

Some people have already received compensation for leasehold issues on recent new builds.

This osrt of thing goes hand in hand with being forced to use the solicitors that the builders insist you use. It's a complete racket. Nothing to do with HTB per-se, but not good when HTB has been promoting buying into these sorts of scenarios - even if it wasn't the intent of HTB. The government are doing something now, but it's all a little late.

Sapphire

wymondham wrote: »

I'm not a fan of Government intervention in someone's private finance (house buying) but the couple are naïve if they thought they would be able to get enough equity to move on after doing pretty much everything to slim down their chances....


New Build - tick
Flat - Tick
Government Scheme - tick
Excessive spending - tick

basically, a perfect storm of poor decisions.

Agree with all that, except 'flat'. I have lived in flats and maisonettes very happily. I don't want the responsibility of a house, and my current maisonette (two maisonettes in one building) has more than enough space for a study and other rooms for living in. It is actually bigger than some cottages I looked at about ten years ago, and there are no charges of any sort.

I think older flats, with older long leases, can be great. One of my relatives also has a huge maisonette, with very big rooms (only two bedrooms with a smallish kitchen). That's for a family of three people, and a business is run there as well. They are very happy in the place, and their lease runs for 900 plus years.

However, I would never buy a new-build flat or house.

Rosemary7391

Graham_Devon wrote: »

They are more likely to have some success here, as this sort of thing is being cracked down on at the moment.

Some people have already received compensation for leasehold issues on recent new builds.

This osrt of thing goes hand in hand with being forced to use the solicitors that the builders insist you use. It's a complete racket. Nothing to do with HTB per-se, but not good when HTB has been promoting buying into these sorts of scenarios - even if it wasn't the intent of HTB. The government are doing something now, but it's all a little late.

It's not leasehold though so it won't get addressed there.



The factor costs sound a bit on the pricey side to me, but they do include the communal heating; depending on whether they include insurance and a sinking fund contribution they could actually be perfectly reasonable (£132 a month). The initial estimate was very low IMO (£30).



I'm curious as to what prices were like in Aberdeen when they bought. Now there are 2 bed flats listed on Rightmove at £80k. Even if they're in less desirable areas, it's no wonder they're struggling to sell.

Pixie5740

Prices started to fall in 2015 so if they bought near the start of the year £205k might be about right but it was a risky time to buy.

I think 1 and 2 bedroom flats have also taken a hit from the decline in the rental market so as well as home owners trying to sell you've got landlords selling up too.

Then there are the flats that have been part exchanged. There are lots of new build developments in Aberdeen and Aberdeenshire, one is offering 105% part exchange. The builders are making money selling the houses so can afford to take a big hit on the sale of the part exchange properties.

tara747

I have no sympathy and I won't be happy if taxpayers have to bail them out. Not a penny. Caveat emptor.

There were warnings. If they're too stupid to take any notice, that's ther own look out.

PasturesNew

If you buy a home you need to keep your hand on your sixpence .... not go popping out sprogs almost before the new big sofa's arrived.

triathlon

Graham_Devon wrote: »

Effectively the article looks at a couple who are complaining as they bought a new build for "an inflated price" and are now trapped, as the flat they bought has lost £30,000 in it's value as it's no longer new.

"Experts" in the industry are suggesting that housebuilders are overpricing the houses up to 15%, because they can as HTB enables the bank to continue to lend even on inflated prices.

I entitled the thread as "its started" as I expect to see much more of this type of article, and watch with interest as to the damage limitation action the government may or may not take.

I don't actually blame HTB itself for the position they find themselves in. Combination of things. However, it's not a good advert for the government, or very good for us considering many people could pay back less than they borrowed of taxpayer cash.

http://www.thisismoney.co.uk/money/mortgageshome/article-6131611/Help-Buy-left-trapped.html

Here we go again, another "it's started moment" to join the other 1000's of it's started moment that all turned out to be blips. The fact is the government could help FTB's 10 fold more than it is now if it really wanted to or even some say should do, but they don't because we have a strong economy and housing market.
This young couple in a couple of years will be jumping for joy as they stick their fingers up at the sub species known as the bitter renter

Malthusian

With baby toys and clothes filling every room of the flat, Charles, 25, and Jessica, 23, are desperate to move to a bigger family home.

The headline should read "Hoarders blame Government for their flat being untidy".

They have a two-bedroom flat and one baby. There is absolutely no reason on earth they should need a bigger property (whether they would like one is another matter). If the Government gave them a £100k bung of taxpayers' money so they could buy a three-bedroom semi, within two weeks they'd've filled that with crap as well and would demand another bung. The babber in question is eighteen months old and couldn't give the contents of his nappy whether his parents move to a bigger flat or not.

Buying a house is not a risk-free bet. If it was, nobody would be able to own a house as house prices would increase until yields were around the same level as UK Treasury gilts (i.e. by about 5x), and no individual would be able to own a house as every house in the country would be owned by institutional investors, who are willing to pay that much for risk-free returns.

Anyone who buys a house accepts the risk that at times they may not be able to get as much as they paid for it, or never if they are very unlucky.

The Daily Mail has really had to go some to find someone willing to make a Daily Mail face about the fact they have received a taxpayer-subsidised loan on which they are highly likely to make a handsome profit in the long term (three years is not the long term). Hence this utterly ludicrous story where they have persuaded someone that they need to move so that they can fill an entire spare room with baby crap, but are "trapped" by their paper loss on their flat.

And ignoring the fact that they are not trapped, because if they want to move and don't want to realise their paper loss, they can let their flat out at the going rate and rent somewhere bigger for themselves.