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House prices only go up

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    House prices only go up

    "It was a luxury house in a good area, but it was on the market at £695,000 so David Callaghan, 43, reckoned that after negotiating hard to bring it down to £650,000 he had landed a bargain. The property market was roaring away and he was convinced the price would be £750,000 in a year’s time. So he cobbled together the money, stretching himself to the limit with a huge £485,000 mortgage, plus his deposit.

    But this was autumn 2007, and this was Northern Ireland. For a brief moment in time a province that was a byword for violence transformed itself into the world’s most sizzling property market. Builders who were knocking out small estates of semis initially priced at £120,000 were selling them for £200,000 on completion six months later. Investors from the Celtic Tiger south were driving north and snapping up anything they could lay their hands on. Banks were falling over themselves to lend.

    To Callaghan, and thousands of others like him, it made sense to take the largest mortgage possible. He even managed to borrow some other cash and invested in a one-bed buy-to-let in Belfast.

    Then the financial hurricane struck, and with peculiar ferocity in Northern Ireland. Where David bought, just outside Newry, midway between Belfast and Dublin, is perhaps the part of the UK that has suffered the biggest property boom and bust ever recorded. In March, David put the house on the market and it eventually fetched just £240,000 – resulting in a loss of £410,000.

    “We’ve been wiped out,” says Callaghan, who is married with two young children. “We gathered everything together we could and sold it. We’ve sold our car, we’ve sold everything – and managed to get £17,000. So the bank has taken that, as well as the £240,000, and we now have nothing.”

    He had to sell because his income has fallen heavily since 2007 and he has been struggling to pay the mortgage and childcare. “I was getting ill with it, and my wife was stressed and it was affecting our marriage. It was hanging over us like a cancer. I was having to borrow from her dad. Now we’re renting, and are much, much happier. I feel like I’ve got out of jail.” The buy-to-let in Belfast has also gone, but it wasn’t as bad an investment as the house in Newry. It only fell in value by half, not two thirds.

    Claire Dempsey is another victim. She was a single woman in her mid-20s earning not much more than £20,000 a year when, in 2006, her bank offered her an interest-only loan of eight times her income. She scraped together another £23,000 from her savings and from her parents to buy a small semi for a total of £183,000. After falling pregnant and being unable to maintain the mortgage, she eventually sold it for just £65,000."

    Source: Towns the UK property boom forgot:

    #2
    Yep, but that was Ireland and this is London. It couldn't happen here
    'Orwell's 1984 was supposed to be a warning, not an instruction manual'. -
    Nick Pickles, director of Big Brother Watch.

    Comment


      #3
      Originally posted by SantaClaus View Post
      Yep, but that was Ireland and this is London. It couldn't happen here
      Never going to happen, London is special.

      http://www.cih.org/news-article/disp...housing_market

      Comment


        #4
        Originally posted by PurpleGorilla View Post
        Never going to happen, London is special.

        I wonder how much of 'London' contributes to the uptick in the 'UK' figure... assuming UK includes London data.
        ⭐️ Gold Star Contractor

        Comment


          #5
          Just been gazumped on a property over the weekend. Fecking stupid market.
          What happens in General, stays in General.
          You know what they say about assumptions!

          Comment


            #6
            Originally posted by AtW View Post
            Claire Dempsey is another victim.
            "Victim"?

            ????

            She bought a house she couldn't afford, and any reasonable person would have known she couldn't afford it. She was a fool, her bank was a fool, her parents were fools. She thought she could get a house she couldn't afford and make money out of it by selling it on later. Just because other fools enabled her to carry out her own folly doesn't mean she's a "victim." Unless the Guardian has the courage to call her a victim of her own folly. We'll wait a long time for that, won't we?

            Comment


              #7
              Looks like the luxury property market will take a hit:

              Emerging Market Turbulence to Hit Luxury London Property - WSJ

              If the China tribulations spread, there will be the usual bloodbath in the City.
              I'm alright Jack

              Comment


                #8
                Ireland convinced itself it had an economy, outwith Guinness nobody actually buys anything made in Ireland.

                Comment


                  #9
                  Originally posted by MarillionFan View Post
                  Just been gazumped on a property over the weekend. Fecking stupid market.
                  I'm sorry but you live with an archaic property purchase system, in Scotland you offer on a property you get held to that offer.

                  Comment


                    #10
                    Originally posted by minestrone View Post
                    I'm sorry but you live with an archaic property purchase system, in Scotland you offer on a property you get held to that offer.
                    Yeah, but your neighbours would be Scots.

                    Comment

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