How Far Will House Prices Fall? [Volume 6]
Discussion
MX-6 said:
Yes that's what I was thinking, bedroom 3 even has a second window in the position where you might look to add the said bathroom as well. The house looks to have some scope to add value without spending a fortune so could be attractive in that regard. Even around my way there are lots of these Victorian terrace type houses getting the sorts of additions mentioned.
When you compare the other stocks (See below), just at the opposite side of the flats (less than 2 miles away), you could see the value in Forest Gate, Leyton and Newham..https://www.zoopla.co.uk/for-sale/details/57790944...
Squirrelofwoe said:
Another shared ownership experience - I was a FTB in 2016, living in the south east my budget restricted me to a choice of either 1 bed flat purchased outright, or a 2-bed semi on 50% shared ownership.
I took the shared ownership option, and in 2019 re-mortgaged to buy out the remainder of the property so now 100% ownership. Was £245k when I bought the initial 50% stake in 2016 (so cost me £122.5k), then valued at £280k in 2019 when I bought the remainder.
Pros:
-Got me a 2 bed semi in a great rural location with parking for 3 cars / garden etc.
-Cheap mortgage and rent meant I could overpay on the mortgage every month.
-Being a new build meant it was cheap to run in terms of utilities.
Cons:
-Being a new build means the quality is shocking. If I was not reasonably competent with DIY it would have been a nightmare. Even then I've still had contractors out for roofing works and serious plumbing issues. But that is a new build issue, rather than being exclusive to shared ownership.
-The managing agents are a nightmare to deal with. A hideous bloated organisation without a single redeeming feature. Just awful.
-A gazillion restrictive covenants on the property, to the extent that it still doesn't really feel like proper ownership.
-If buying out the remainder of the property, any increase in value before doing so works both for and against you.
We've had superb neighbours, young social housing couple on one side, and another (older) shared ownership tenant on the other. Both have become good friends. Generally speaking the close is fantastic and our house is in a great location within it. Far better than any of the properties (flats) I could have afforded to buy 'outright' in the first instance.
Overall my main gripes largely come down to the property being a new build, rather than the shared ownership experience itself. It's not been great to the point where I would say it's a no-brainer, but equally I would not rule it out without at least giving it some thought.
We are looking to move later this year but shared ownership has meant spending the last 5 years in a 2-bed semi with a nice garden in a great location, vs a 1 or 2 bed flat with poor parking if I had disregarded it. So it's been worth it for me, but definitely not without its downsides. If you can afford a decent property without needing shared ownership then do it- the hassles aren't worth the extra budget reach IMO. But if, like me, the extra budget is a gamechanger in terms of what you can get, then it can definitely be worth looking at.
As for buying another new build, either outright or on shared ownership, I would never touch another one with the longest of bargepoles unless I absolutely had to. I would hope things are better at higher values, but in the FTB price bracket the quality is disgraceful.
edited to add: another quick point on the social housing- in our close the social housing tenants are all great, no issues at all and very courteous/friendly. The only vaguely problematic tenants are a general busybody and a neighbourhood parking enforcer- both of which live in the most expensive properties in the close and look down their nose at pretty much everyone else. Probably PH members!
That's a relatively positive outcome, all things considered. Our budget isn't much more than your initial purchase (mainly due one to me being a full time student so limits income as they won't include my maintenance grants) but due to work and aforementioned university commitments we need to be in the middle of two cities. However, coincidentally, it just so happens that this mid point is in the most desirable 'golden triangle' of West/North Yorkshire so getting anything beyond a small apartment or flat is tricky. We rent here now, and love the village but would not be able to afford anything here currently.I took the shared ownership option, and in 2019 re-mortgaged to buy out the remainder of the property so now 100% ownership. Was £245k when I bought the initial 50% stake in 2016 (so cost me £122.5k), then valued at £280k in 2019 when I bought the remainder.
Pros:
-Got me a 2 bed semi in a great rural location with parking for 3 cars / garden etc.
-Cheap mortgage and rent meant I could overpay on the mortgage every month.
-Being a new build meant it was cheap to run in terms of utilities.
Cons:
-Being a new build means the quality is shocking. If I was not reasonably competent with DIY it would have been a nightmare. Even then I've still had contractors out for roofing works and serious plumbing issues. But that is a new build issue, rather than being exclusive to shared ownership.
-The managing agents are a nightmare to deal with. A hideous bloated organisation without a single redeeming feature. Just awful.
-A gazillion restrictive covenants on the property, to the extent that it still doesn't really feel like proper ownership.
-If buying out the remainder of the property, any increase in value before doing so works both for and against you.
We've had superb neighbours, young social housing couple on one side, and another (older) shared ownership tenant on the other. Both have become good friends. Generally speaking the close is fantastic and our house is in a great location within it. Far better than any of the properties (flats) I could have afforded to buy 'outright' in the first instance.
Overall my main gripes largely come down to the property being a new build, rather than the shared ownership experience itself. It's not been great to the point where I would say it's a no-brainer, but equally I would not rule it out without at least giving it some thought.
We are looking to move later this year but shared ownership has meant spending the last 5 years in a 2-bed semi with a nice garden in a great location, vs a 1 or 2 bed flat with poor parking if I had disregarded it. So it's been worth it for me, but definitely not without its downsides. If you can afford a decent property without needing shared ownership then do it- the hassles aren't worth the extra budget reach IMO. But if, like me, the extra budget is a gamechanger in terms of what you can get, then it can definitely be worth looking at.
As for buying another new build, either outright or on shared ownership, I would never touch another one with the longest of bargepoles unless I absolutely had to. I would hope things are better at higher values, but in the FTB price bracket the quality is disgraceful.
edited to add: another quick point on the social housing- in our close the social housing tenants are all great, no issues at all and very courteous/friendly. The only vaguely problematic tenants are a general busybody and a neighbourhood parking enforcer- both of which live in the most expensive properties in the close and look down their nose at pretty much everyone else. Probably PH members!
Edited by Squirrelofwoe on Friday 5th March 12:13
There are some attractive looking shared ownership properties though, which would certainly suit in terms of location and due to generally being semi's we would have the added bonus of parking and a garden. Two years till I graduate, which would mean then either upgrading or keeping whatever we're in and getting something else.
We have found a nice 2 bed apartment, but I am also concerned about service charges. It's currently £307 (this includes buildings insurance) per quarter plus £150 ground rent but my biggest worry is price hikes. Are these tied to some contractual agreement with a term or is it literally just as and when they feel like increasing cost?
Edited by Jimmy No Hands on Friday 5th March 12:36
Edited by Jimmy No Hands on Friday 5th March 12:37
ooid said:
MX-6 said:
Yes that's what I was thinking, bedroom 3 even has a second window in the position where you might look to add the said bathroom as well. The house looks to have some scope to add value without spending a fortune so could be attractive in that regard. Even around my way there are lots of these Victorian terrace type houses getting the sorts of additions mentioned.
When you compare the other stocks (See below), just at the opposite side of the flats (less than 2 miles away), you could see the value in Forest Gate, Leyton and Newham..https://www.zoopla.co.uk/for-sale/details/57790944...
The property in the link looks to be of a more typical price that I would associate with London, albeit somewhat large the one discussed above.
Raj28 said:
Sorry, a general question - is it not the case with shared ownership that despite only owning a percentage of the property you have to pay all of the service charges?
Yes, but it should be a wash as if you rented that property the landlord would be paying those charges and passing them on in the rent.ooid said:
Quite decent area Wanstead Flats walking distance and etc...
That house is 3 minutes from me. Its on cann Hall Road which is now suffering under the low traffic neighbourhood scheme with both noiee and pollution. It will have buses and all sorts going past, and right outside it is a pedestrian crossing which isn't ideal. Stow brothers tend to price low and try and get another 10-30k on top of the guide price.okgo said:
NickCQ said:
You could probably nibble a small one out of 'Bedroom 3' at the back using the window there.
Surprised the current owners didn't do the loft when they refurbed it.
Lofts cost money, that has been done pretty cheaply by the looks.Surprised the current owners didn't do the loft when they refurbed it.
NickCQ said:
Slopy roof loft no dormer or bathroom would be, what, £40k max? Adding a bedroom and 250 sqft when the property is priced over £500 / sqft seems like a no brainer financially.
Lofts are actually quite cheap in my opinion for what you get. My loft guy has probably put his prices up since I had mine done but I got change out of 40 grand for an L shaped 400 sq ft 2 bed 1 shower room loft. princeperch said:
NickCQ said:
Slopy roof loft no dormer or bathroom would be, what, £40k max? Adding a bedroom and 250 sqft when the property is priced over £500 / sqft seems like a no brainer financially.
Lofts are actually quite cheap in my opinion for what you get. My loft guy has probably put his prices up since I had mine done but I got change out of 40 grand for an L shaped 400 sq ft 2 bed 1 shower room loft. 
princeperch said:
ooid said:
Quite decent area Wanstead Flats walking distance and etc...
That house is 3 minutes from me. Its on cann Hall Road which is now suffering under the low traffic neighbourhood scheme with both noiee and pollution. It will have buses and all sorts going past, and right outside it is a pedestrian crossing which isn't ideal. Stow brothers tend to price low and try and get another 10-30k on top of the guide price.
NickCQ said:
Interesting story in the FT this morning (paywall, sorry)
https://www.ft.com/content/0f4f74dc-7e32-448d-9eb0...
So rather than make 3% by lending to BTL Landlords, they intend to make 6% by doing it themselves. https://www.ft.com/content/0f4f74dc-7e32-448d-9eb0...
FT said:
Lloyds Banking Group is planning to become a large private landlord as it searches for new sources of revenue in an era of low interest rates, according to documents seen by the Financial Times and people familiar with its plans.
The initiative, known internally as “Project Generation”, will involve buying and renting out new and existing housing stock across the UK, and aims to have its first tenants by the end of this year.
Can only see this driving prices one way if all the banks start doing this in scale.The initiative, known internally as “Project Generation”, will involve buying and renting out new and existing housing stock across the UK, and aims to have its first tenants by the end of this year.
I'd be happy to lend them.the money at 3%. But what they now pay on my old ISA is a joke.
s. z4RRSchris said:
The PRS model is done by everyone at the moment but it’s big new build flats housing stock, hard to manage it properly on second hand stock,
Not surprised Lloyds are coming into the market,
To be honest, my instinct is that if Lloyds are getting into something it's probably time to get out of it!Not surprised Lloyds are coming into the market,
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