Risky Property? Advice needed(11 Posts)
I've recently sold my first home and made a decent profit on it. I'm wanting to buy a bit closer to work in a desirable village. The house i'm looking at is in a fairly new (2006) build area of the village and it would take up the majority of the lump sum profit I've made so it is quite a scary move.
The trouble is, I've been researching the area on Zoopla, Rightmove, etc. and looking at sold prices in the new build area. It seems that all properties have made a loss since they were bought brand new in 2006. The majority of the losses are between 10% - 20% and none have sold for more than they were bought, despite lots having various improvements made (although not extensions, more like new kitchens, bathrooms, garages added, that sort of thing).
Also, nothing has sold in the area since 2014. However, there are about 10 properties up for sale now (out of the 56 on the new build site). All are for sale at around 10% less than what they last sold for.
Does this sound too risky? I would need to move again in around 3 years with work and obviously don't want to lose any of the money I put into the house as it is now the only savings I have and would be my deposit for the next place.
Any advice would be much appreciated. Thank you in advance.
2006 was a peak. Most properties bought then have lost value. New builds also lose value, same as new cars - who wants a second hand shoddy shoe box?
Also check there isn't an issue with the estate - flood plain?
It is common for new builds to loose money.
I would research the area for planning etc, seems strange nothing is selling especially at the mo.
Well that's comforting to know, I had no idea it was the norm for new builds to lose money. I've checked flooding and that seems fine. Can't believe I didn't think to check for planning permissions so I've just had a quick glance and will do more thorough searches tomorrow, seems there may be a new site for more new builds the other side of the village not sure if that's why ppl are now trying to sell in the area I'm looking or if it will decrease the value of their properties even further. But you'd think they'd only build more houses if there was a demand for them?
Also ask around - that new chicken farm won't appear on the searches if planning not yet approved...
Yes, new builds often do lose money. It also depends a bit on the estate.
Some new build estates are incredibly badly designed and quite unpleasant to be in. There are hideous problems with parking and no pavements and other horrors. Others are much better designed and have recognisable streets and sufficient parking. The houses on the badly designed estates from 2006-8 around here tend to be very hard to resell and are still making losses (loads of them have been rented out, now because the owners couldn't sell). The houses on the better designed estates from the same period are doing better.
I did manage to have a chat with a few ppl living in the area and they mentioned a lot of home owners were renting out their properties there until the market improved, which I interpreted as they struggled to sell for a price they wanted. I'll visit the local pubs and see if anyone has heard about any future planning.
That is another good point about the parking in the area. The house I have my eye on has a garage and driveway but didn't think to look at the neighbours' parking so will definitely check that out.
Thanks so much for the tips so far. It feels much riskier than my first buy!
If you plan on selling soon I would not touch thoses houses. You might get stuck with them. Is the a more saught after area you might look into?
Unfortunately I think you might be right. I went for a walk around the area yesterday and hadn't noticed before how miserable everyone seemed I got talking to a few ppl and some were saying they're basically stuck in negative equity and a large company nearby has recently made lots of redundancies so that's why some houses have probably gone up for sale and the owners are just accepting making a loss.
Never noticed how many To Let signs were about before either. Not in a snobby way but I'm not a big fan of having the continuos turn around of new neighbours that renting brings as I've had a bad experience with that before.
There is the rest of the village which is much more desirable. I could afford something smaller and not as nicely finished there so think that may well be my new plan Better I've realised now rather than later though, so thank you all for the help!
At least you know now so you can look elsewhere.
The problematic estates near me have very high numbers of rented properties. And also large numbers of people who would love to move but are in negative equity. It's not good. I think many of them bought off plan so they had no idea how the estate was really going to look and just couldn't know that it would feel stifling and overbearing, or that they'd essentially be living in what appeared to be a bin lane, or that it would be an unnavigable warren, etc. It's such a shame because they could have been lovely estates in very desirable areas.
That may well be the case in the area I was looking actually, the neighbours seemed to still be bitter about little things like so and so having the larger garden when it wasn't mentioned in the plans. Not a nice atmosphere at all really. It is a shame though, like you say, as it could be a nice area and it's in a lovely village.
Yes, definitely good I know now and can look elsewhere. This house buying malark is tough!
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