So - negative equity?

silvercar

Council built terraced houses are often better quality than more recent modern boxes. As more people buy out and sell on their ex-council homes, the area could actually do quite well.

I would rather be buying an ex-council terrace than a new build city centre flat in the present market.

epz_2

silvercar wrote: »

Council built terraced houses are often better quality than more recent modern boxes. As more people buy out and sell on their ex-council homes, the area could actually do quite well.

I would rather be buying an ex-council terrace than a new build city centre flat in the present market.

yeah but it really depends on the area, the council up here have a lovely practice of boarding up flats and moving crack heads into areas they want to redevelop forcing the owners to sell out at a much reduced price.

if the op is willing to sell at a loss already the im betting they arnt in a neighborhood full of old folks who bought their places years ago and new residents with jobs and mortgages.

PasturesNew

mattb001 wrote: »

Thanks. Was there a penalty for this? Hideous rates, fees etc?

Not really. They figured if you were in negative equity on one property - and a good safe bet - you might as well be in negative equity for the same amount on another one.

Depending on how much extra you're borrowing - and how your financial situation has changed (wages up perhaps), it's not always MORE of a risk to them.

And .... they had to stay in business somehow - and they stay in business by lending money. So it made sense. They had to adapt and change to the market.

PasturesNew

The reason houses at the bottom of the food chain fare worse is because potential buyers hang on and hang on, hoping to skip over that one entirely and jump straight into the next level above.

During/after the last crash people found 1-bed places were disregarded as people were aspiring to a 2-bed as their entry point.

People will therefore aspire to the same style of property in private developments over a council estate.

As prices are falling, people are looking to get the best/biggest they can... and they will wait a bit longer to see if prices fall a bit more.

Would you buy a 1-bed council flat today, if you thought in 2 years you could buy a 2-bed semi on the newer estate a mile up the road for the same money?

Running_Horse

SquatNow wrote: »

That's called inflation. Mostly.

Call it what you want (have other prices really tripled in the meantime?). I didn't buy my house for profit (or loss), I bought it for somewhere to live in. For me it was better than renting, and much better than the squatters I knew in the 80s, most of who are now bitter they did not buy and are more obsessed about prices than most property bores.

carolt

Given that you have decided that where you're living is unsuitable, or will be very shortly, regardless of where you think prices will be heading, it seems a good time to sell up.

I personally think prices will fall, and agree that council houses in dodgy areas will be some of the worst hit - though also agree with silvercar that this time round a city-centre new build is probably an even worse bet (as they were priced a lot higher to begin with).

Presumably, unless you have an interest only mortgage, you've been paying off some of the mortgage anyway (albeit a tiny amount) so might not be in negative equity anyway. Take it to an estate agent NOW before the HIPs deadline in a few days' time, and find yourself somewhere better to live, where you're not worried about your neighbours...

dannyboycey

You probably have a few thousand equity in the house as it is now. One option would be to sell now and use the profit to cover any fees / costs. OK, you probably wont have made any money, but you probably wont have lost any/much either. You could then rent for a few months to see what happens.

Alternatively, you could sit tight. If it's your neighbour that is making you unhappy with the area, is there anything you could do about this? Talking to them, making complaints to the authorities etc etc.... might be worth a go?

Spendless

Hi

My first house went into negative equity within the 1st year of buying it. It became a problem when I met dh and needed a bigger house. I wasn't aware of any mortgages that did let you carry the neg equity elsewhere or I'd have certainly looked into this option. When we put the problem to my own BS they told us they couldn't help. We ended up renting our house out and buying somewhere bigger, by the time the tenants had moved out, house prices had risen and we sold at a profit.

I know of 3 other couples that also needed/wanted to move and their house was in neg equity. 2 of them saved up the amount the house was in neg equity by. The 3rd couple bought another house with a cashback mortgage and the cashback paid off the neg equity they had (2 0r 3 thousand £££s).

Before we rented my house out I got an EA to value and he said in his experience he would say a 10 year cycle to come out of neg equity. In my case he was very close as I bought late 94 and sold in 04. House prices started rising in my area mid 2002.

mattb001

Thanks for all the replies, some food for thought there.

vivatifosi

Here's the Government's view from "last time round".


taken from "Right to Buy" review 1995:



Former council homes in general are one of a category of dwellings which may
have fallen disproportionately in value during the current recession. In that sense,
purchasers of former council homes may wait longer than average for their
properties to regain value. Equally, however, vendors in this study are in the main a
group which bought cheap and sold in a buoyant property market and who were
selling some of the best former council dwellings. Specific problems associated
with ex-council home re-sales are more likely to arise with subsequent cohorts of
vendors. Even in a more buoyant housing market, Right to Buy purchasers in less
desirable dwellings may experience difficulties of reselling, This will be most
closely associated with flats and particularly multi-storey blocks which will be
among some of the lowest value properties on the market. A greater number of
potential vendors may experience difficulties of reselling in the future and there
may be a greater incidence of constrained mobility.

See http://www.parliament.uk/commons/lib/research/rp99/rp99-036.pdf