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Property Market
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roz


Posts: 1,793
Joined: Mar 2005
Post: #1
25-07-2011 11:49 PM

[Split from SE23 Topics > Forest Hill in The Times property section]

Talking to a local estate agent it appears that the market for flats and for first time buyers is extremely slow, as mortgages are so hard to get. Its ok stipulating a squeaky clean credit history but few people have this. Time for some realism in the property market! I;m not talking about being silly again and lending to bad risks , but nothing is going to change unless a few risks are taken.

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Newbie


Posts: 40
Joined: Apr 2008
Post: #2
26-07-2011 10:24 AM

dartmouth Wrote:
Many people on this forum will hope for everything which I have tried to describe because they do want their property to increase in value, whilst simultaneously hoping that Forest Hill becomes more varied and culturally diverse etc. Like many, I bought my first home in Forest Hill and I want to make some money so that I may upgrade sooner rather than later and buy again, in Forest Hill. There is nothing at all wrong or shameful about that. I cant help but wonder whether those who seem to want Forest Hill to stay frozen in time are simply perhaps those who are more settled and dont have the need to improve their property portflio. Shouldnt mean the rest of us cant strive for something better though.


Agree 100% - everyone looks at these kind of debates from their own personal circumstances. I would also like to upgrade sooner rather than later from a flat to house in Forest Hill so I also have a long term interest in the area rather than just making a profit and moving on.

House prices wont rise in the next 2 years at least regardless of whether a pizza express or similar opens up or not untill the mortgage situation improves. In the meantime we should all want Forest Hill to continue to improve and cater for all tastes. I still think its fair to say that there is still little choice for people in the evening who want a few drinks and decent meal and there is nothing wrong with wanting better

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seeformiles


Posts: 269
Joined: Apr 2005
Post: #3
26-07-2011 12:03 PM

People are making some very strong claims here; I don't recall anyone saying they want FH frozen in time, or festering under a pile of grot.

Sometimes I can't help noticing that there is a particular ideal model put forward of how Forest Hill should look. And sometimes it feels quite narrow and a touch unrealistic.

That doesn't mean, as I've said many times that Forest Hill shouldn't move forward, but if property prices shoot up to those in nearby areas how likely is it that you will be able trade up here?

If you have to pay a fortune for a modest sized house, only those moving in from more expensive areas will be able to afford it. Anyone who wants to stay in the area will be trapped where they are - without the help of flexible finance or generous relatives.

I doubt mortgage lenders are offering 95 percent mortgages anymore. They probably never will again, so how do most people trade up from a small flat to a 2 or 3 bed house? It's out of reach for the majority of people on normal incomes.

There is something fundamentally immoral about the gap between earnings and property prices becoming even wider. It's bad enough as it is.

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brian


Posts: 2,002
Joined: Apr 2005
Post: #4
26-07-2011 12:20 PM

Roz
You say very few people have a good credit history. I am not sure how you know this.
I and many friends do have.
If you have lived like the quotes of Mr Micawber then you should be OK.

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Sherwood


Posts: 1,355
Joined: Mar 2005
Post: #5
26-07-2011 12:40 PM

I have a good credit history. But I still had credit card companies putting my interest rate up to 30%! I cancelled those cards.

My point is that a good credit history probably still does not help you get a loan at a reasonable rate of interest.

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AMFM


Posts: 306
Joined: Oct 2007
Post: #6
26-07-2011 01:14 PM

It has always been my understanding of credit rating that if you are someone who has never used credit cards (for example) your credit rating, perversely, will not be good - you have to have used credit in order to have a rating. Is that right or am I making it up?

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Londondrz


Posts: 1,538
Joined: Apr 2006
Post: #7
26-07-2011 01:23 PM

As strange as it sounds you need credit to have a credit rating so if you dont have credit, debit cards etc you can sometimes have an adverse rating.

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Cheeky


Posts: 215
Joined: May 2009
Post: #8
26-07-2011 01:50 PM

Qoute:

"If you have to pay a fortune for a modest sized house, only those moving in from more expensive areas will be able to afford it. Anyone who wants to stay in the area will be trapped where they are - without the help of flexible finance or generous relatives"

Surely thats what repayment mortgages help with?

Make hay while the sun shines, isn't that what they say?

It's not all doooom & gloooom out there; hopefully the clouds haven't gathered over the whole of Forest Hill!!!!

(obviously that's only relevant to those who already own their own place)

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seeformiles


Posts: 269
Joined: Apr 2005
Post: #9
26-07-2011 04:17 PM

Hi Cheeky,
there's no point taking that piece out of context. The whole point is that it's hard to get a mortgage now. And you won't get one without a very large deposit, unless you go for the Shared Ownership schemes which include a lot of extra costs that aren't always obvious upfront.


I'm not promoting doom and gloom, simply reflecting how the mortgage market is at the moment...and being realistic!!

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Cheeky


Posts: 215
Joined: May 2009
Post: #10
26-07-2011 04:52 PM

Not really, my points were:

1) If you have had a repayment mortgage for a number of years then whatever equity you have in your house can be used as a larger deposit for your next property. Obviously this may take a while but people shouldn't just depend on increasing house prices in order to move up the property ladder.

2) With the current Bank of England base rate being so low (the sun shining) hopefully you will be paying a better percentage of your mortgage off (there you are in the fields making hay) ....in turn increasing the equity in your home.

Sorry if it was a confusing analogy (not sure if that's the right word), cliche perhaps, but it made sense in my head Smile

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seeformiles


Posts: 269
Joined: Apr 2005
Post: #11
26-07-2011 06:01 PM

I have equity but I doubt I can trade up to what I want - which is still very modest.
Plus you have to factor in all the usual costs, legal, stamp duty etc.

The only way I could do it is to move to another part of the country where finding work could be a real problem.

Also as Roz said earlier, peoples' circumstances may have worsened anyway due to the cut backs, jobs being shed etc.

Again I'm just being realistic and countering the idea that house prices increasing significantly will enable people to easily trade up within the same area.

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mrcee


Posts: 128
Joined: May 2010
Post: #12
26-07-2011 10:00 PM

Got to agree seeformiles, it doesnt make sense that rising prices allow you to trade up, its actually the opposite which holds true of you have equity in your house.

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se23northener


Posts: 38
Joined: Jan 2008
Post: #13
01-08-2011 01:30 PM

I agree too: rising house prices are bad for those wanting to trade up, contrary to the belief that some hold, like seeformiles:

Quote:
...hope that my investment makes me some money so that I may upgrade to a better property one day...


Think about this scenario: you buy a flat in 1999 for 100k at a time when large houses cost 200k. Then by 2009 you've worked hard and cleared your mortgage early, plus your flat has doubled in value to 200k so you think 'great, time to sell and upgrade'. But because the house you want has doubled in value too, to 400k, even though you have equity for a deposit, you still need a bigger mortgage than you would have needed if house prices had stayed frozen. In fact in this example, the mortgage needed to buy the 400k house is twice as big as it would be if house prices had stayed the same.

This can be a little difficult to grasp, which is probably why there is a misconception that rising house prices is a good thing.

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sydenhamcentral


Posts: 269
Joined: Mar 2008
Post: #14
01-08-2011 02:46 PM

Agree, rising house prices are only a good thing to your own circumstances if your area goes up more than others.

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seeformiles


Posts: 269
Joined: Apr 2005
Post: #15
01-08-2011 04:27 PM

"I agree too: rising house prices are bad for those wanting to trade up, contrary to the belief that some hold, like seeformiles:"


I also said that rising house prices make it harder to trade up in the same area. Unless that's what you meant?

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showtunesgirl


Posts: 203
Joined: Feb 2008
Post: #16
01-08-2011 05:42 PM

I have lived in the area for many years since I was a student. I could have just about afforded to buy three years ago but we didn't find anything to suit. Now it's almost impossible due to the mortgages situation and the prohibitive prices.

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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #17
01-08-2011 06:01 PM

The sad thing is one needs more luck than knowledge in the property game. The reason we have a house rather than noting is simply the timing of when I met my spouse and decided to have a home. Had we met 5 years later we would be renting now.

I think that the future generations have it much harder than we did. BTL investors have a big role in this. If they started 15 years ago, house price inflation would give them equity and deposits for more properties. These properties are being paid off by their tenants and the more properties they have the more income they get. At some point the tenants would pay for the properties and such an investor gets a property for being able to get a loan someone else paid off.

So the moment the banks were giving out loans for BTL instead to occupiers the future generations lost.

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seeformiles


Posts: 269
Joined: Apr 2005
Post: #18
01-08-2011 06:37 PM

Hi Showtunesgirl,

yes I agree. I saw someone on another thread claim that 220,000 is a bargain price for a flat. A bargain for who I wondered?
You would need an income of about 60,000 plus probably a 20 percent deposit.

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Newbie


Posts: 40
Joined: Apr 2008
Post: #19
02-08-2011 03:52 PM

Agree with DHT. They should have imposed a limit on the number of properties a person can buy or at the very least put some sort of tax on each additional property owned, making it less attractive.

Its wrong that one person can own an entire street while first time buyers cant afford to get on the property ladder.

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showtunesgirl


Posts: 203
Joined: Feb 2008
Post: #20
02-08-2011 03:59 PM

Exactly seeformiles! Maybe it's a bargain in relative terms but when you bear in mind that in 1992 my parents bought a four bedroom house in Hampshire for 89k, my heart really does sink.

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