Help Advice needed. Luxery apartment dropped 25K in price, in just over a year!

Phil1k

Hi,

My girlfriend has changed jobs and needs to move house. In Nov of 2006 she paid £88,500 for a 60% share in a apartment with a non profit organisation. This apartment was bought as new from the org that built them.

She has come to sell it and its been valued at £125,000 by a charted surveyor in the area. I don't see how its possible to lose so much money over a short period of time.

Its blatantly obviously to me that this apartment has been overvalued at time of purchase. Is there anything we can do? Is overvaluing a apartment illegal? Any advice would be very much appreciated.

Thanks
Phil

Kez100

Why was it overvalued? The market is falling and the sentiment now more negative than positive. Falls tend to affect flats moreso as houses become cheaper and more affordable and so flats less desirable.

The property is now used, not new - more reason for a fall in price.

There is, in most areas, a glut of flats and hence more supply less demand - greater falls in value.

This is not called illegal. It's called Negative Equity.

izzybusy23

Phil1k wrote: »

Hi,

My girlfriend has changed jobs and needs to move house. In Nov of 2006 she paid £88,500 for a 60% share in a apartment with a non profit organisation. This apartment was bought as new from the org that built them.

She has come to sell it and its been valued at £125,000 by a charted surveyor in the area. I don't see how its possible to lose so much money over a short period of time.

Its blatantly obviously to me that this apartment has been overvalued at time of purchase. Is there anything we can do? Is overvaluing a apartment illegal? Any advice would be very much appreciated.

Thanks
Phil

Welcome to the credit crunch and house crash drama.

Sadly this kind of thing will be all too common in the following months.. Did you not watch Panorama last night? If you didn't watch that, then make sure you tune into Repossession, repossession, repossession tomorrow night at 10.35 PM on ITV1.. that is sure to be an eye opener if you don't know what is happening with the economy.

subjecttocontract

When you buy a 60% share of a property you don't, surprisingly, always pay 60% of its value. Normally the remaining share (40% in this case) can be purchased at a discount and part of that discount is built into the initial price paid.

What was the full valuation of the property in Nov 2006 ?

brit1234

Of course you are going to get a lower price in a falling market.:rotfl:

All property has been very overvalued for years so its easy for large price falls especially newbuild flats. Its not illegal, you should of realised it was overvalued when you bought it.

mpsavuk

Phil1k wrote: »

Hi,

My girlfriend has changed jobs and needs to move house. In Nov of 2006 she paid £88,500 for a 60% share in a apartment with a non profit organisation. This apartment was bought as new from the org that built them.

She has come to sell it and its been valued at £125,000 by a charted surveyor in the area. I don't see how its possible to lose so much money over a short period of time.

Its blatantly obviously to me that this apartment has been overvalued at time of purchase. Is there anything we can do? Is overvaluing a apartment illegal? Any advice would be very much appreciated.

Thanks
Phil

New apartments are like new cars. You drive them off the forecourt and they are now a used car. Hence the values fall by thousands of pounds.

The apartment probably wasn't overvalued at the time and the recent valuation is the fair price in todays market.

Everybody expects to make money from their property and most do over the long term but buying a new apartment within the last 2 years or so is the second worse thing you can do.

m00m00

my initial thoughts when seeing this ?

only 25k you are lucky


'luxury apartments' here are regularly losing 50% of their value or more.

157k one year, 65k the next.

Numbnutz_2

How can something so cheap ever be described as 'Luxery' (sic) ? Did she pay more to get this adjective added to the deeds ?

lynnexxxo

Phil,

Welcome to the board.

I'm afraid that your thread your thread may be the first of many in the foreseeable future. Newbuild apartment blocks are overpriced and when people come to sell they are horrified to find they can't even sell for what they bought for.

I suppose you could compare it to buying a new car - most people are aware that when you buy a new car you lose a good few thousand pounds as soon as you drive it out the showroom. You pay extra for the shiny newnesss of it.

Has there been a lot of new apartments built in the area? It maybe that the sheer volume of apartments means that there is just not enough buyers for them all - meaning those on the market have to drop there prices.

Having said that, I would look out the orginal survey on the flat, how much does it say its worth? I don't think that many surveyors (who want to keep there job) would lie, but they may have put the price you paid as right at the top of the bracket.

You mention the flat is owned 40% by a not for profit organisation, whats the deal with them, do you have to pay back 40% of your orginal purchase price when you sell?

I'm afraid my best advice (your not going to like it!) is so try and sell the property for as much as you can as quickly as you can. Hopefully you will get enough to pay the mortgage off .

PS : I don't really see any reason to rub the OPs nose in it, he came on here fro advice, has lost a lot of money and some peoples reaction is to laugh!! Come on guys, a bit of respect please!!

Curious_Moose

I hope there wasn't anything in the sale terms to the effect that, if the property is sold for less than the original purchase price, the person holding the 40% does not bear their portion of the loss.

SquatNow

This can't be possible... house prices only go up, we all nkow that.

Get another surveyor, this ones obviously useless... the place should be worth over £200k by now.