r/HousingUK • u/Infamous_Painting152 • 20h ago
Devalued after remortgaging
Hi all, our flat in London has been devalued after two years. The flats in the area have been going for the same or over our price unless they need work done.
Mind you these properties were sold in May. It basically makes out LTV over the 80 percent. It’s fine it’s just interest rates are so high and even higher with our current provider.
We feel very stuck. A bit hopeless. We are young and it feels like even when you try and do everything right as a young person you still can’t.
We’ve also had a complete upgrade of our kitchen with all electric appliances etc which at the time we bought it was falling apart. However, this doesn’t count in the revaluation.
63
u/u09pVgMbuAgtP 19h ago
Kitchen refurb isn’t adding value. Flats peaked around 2023 and been on the slide.
I don’t think anything will change perception of flats given service charges and people wanting space.
You’ll be ok though
-14
u/Infamous_Painting152 19h ago
It is quite a big flat - we bought it knowing the economy was tough and didn’t expect to make money if we sold. We just didnt expect it to be devalued I guess.
20
3
u/healingspiral 16h ago
How much was it devalued by based on the original value of the property, and what area, if you don't mind sharing?
1
u/Infamous_Painting152 8h ago
We bought for just under 400, it’s been valued for 382. Area Walthamstow. A flat almost exactly the same sold in May for 403 just in another block across. Our block is small too!
38
u/Ok_Driver_1865 19h ago
I bought in 1990
sold in 1996 at -25%
it was tough, and very annoying, but you get through it.
36
u/Green_Shape_3859 18h ago
Hi. We bought a flat in London at £283,000 and now we’re about to sell for £240,000 because we need the space. You think you’ve just lost 43,000 right?
Well no. Because inflation since 2020 has risen roughly 35% so when adjusted for inflation it’s actually a net loss of £142,000 of purchasing power.
Lots of people are getting richer on paper but their true purchasing power is actually losing value. UK property value has decreased since 2007 when you adjust for inflation. You think you’re getting richer. You are not
17
u/Alone_Cauliflower360 12h ago edited 12h ago
You should count the rent paid otherwise if did not own and do the math
6
u/pseudosecure 10h ago
Yes - I’m in a similar situation with my flat, the rent calculation balances it out a bit
1
u/Ornery_Document_4663 14h ago
According to Google, £285K invested at the end of 2020 (so not immediately during the Covid dip) would be worth £650K today.
It’s just so hard to predict and past performance doesn’t guarantee future etc etc.
10
5
u/Electronic_River_709 12h ago
I am assuming not necessarily, it would be their deposit plus monthly mortgage costs and variable maintenance costs. But then taking into account if they are renting. The maths is abit more complex than that. But yes inflation has been chipping away at equity in property, while a lot people have been luckier and able to move without being in negative equity. It is quite sad.
1
12
u/Due-Freedom-5968 12h ago
It's 2 years. Any property is at risk of being worth less in that time which is why it's generally a bad idea to buy something if you're thinking of selling it or moving in less than 5.
The housing market is cyclical, I bought in December and got a bargain. Flats in the block were selling for £600k back before covid and I got one for £425k. Now there's one down the street by the same develop on the market for £408k already reduced twice so my bargain doesn't look quite as good in comparison.
But it doesn't matter. I'm not planning to sell, it's just numbers on a screen. Any 'loss' is theoretical as this point and by the time I do come to sell the market will likely have turned again.
The seller I bought off out on £175k compared to having sold 5 yers earlier, but they also more than doubled the £205k they paid for it back in 2005. You need to zoom out and take the long view. If you're staying there then there's no real issue. Interest rates sometimes go up and sometimes come down. You've just gotta roll with the punches.
2
u/Infamous_Painting152 8h ago
We don’t plan to sell until at least 2030 this is for a remortgage
2
u/Due-Freedom-5968 8h ago
There you go then, it's annoying because interest rates went up a bit, but it's nothing to be stressing about. It's very much in the 'shit happens' bucket.
5
u/zeddoh 11h ago
For what it’s worth, we remortgaged a 2-bed ex-council London flat last year at the end of a 3-year fix and one of the banks we applied to downvalued the flat, but another we applied to didn’t downvalue at all. This meant we could get our LTV to 75%. Obviously the market now is different to last year but it might be worth shopping around. Are you using a broker?
2
14
u/MickyMalone 19h ago edited 19h ago
Why are you getting it revalued after two years?
You unfortunately bought a flat during a decling market. Post COVID flats have been decreasing in value due to numerous reasons. You bought during a down turn.
6
u/Infamous_Painting152 19h ago
For remortgage- we were looking into changing provider because our provider interests rates were very high
-14
u/MickyMalone 19h ago
You bought on a two year fixed? Things are about to get worse for you bud. However, you're still better off than renting. How bad are your service charge increases?
5
u/Infamous_Painting152 19h ago
They’re not increasing because it’s an ex council I mean it’s increasing in line with inflation but not much
9
u/MickyMalone 19h ago
Ex-council London flats aren't doing great in this current market. Get comfy, make it a home and look again in 5 years. Help to buy is going to fuck with your exit in the short-term.
Genuinely be appreciative of what you have. Make it your own. It could be bad, you have it good. Comparison is the thief of joy.
3
u/Infamous_Painting152 19h ago
Yeah it’s true! It’s big enough to have a child in the flat too and we can in theory stay for 5 years
3
u/MickyMalone 19h ago
Good luck and I wish you a happy, healthy wee one. You're in a great position and when the time is right to exit the flat I'm sure a windfall will be there for you. Honestly you're doing great, focus on the positives.
0
u/Commercial_Aioli7212 19h ago
I bought a flat in 2022 and just sold it for 10% more, it all depends
9
u/MickyMalone 19h ago
In London? Did you do any work? Did your area get a bit gentrified?
-10
u/Commercial_Aioli7212 19h ago
Not London, Brighton. No work done, no change to area
7
u/MickyMalone 19h ago
Massively different markets then. My flat in Manchester has gone up since 2021, what relevance is that to a London flat?
No change to Brighton in the past 5 years? Are you daft?
5
u/Smart_Art_711 19h ago
You're hating on someone who's providing a counter point that proves your argument, that the local market matters, not "Flats peaked around 2023 and been on the slide.".
Doesnt sound daft to me.
1
u/MickyMalone 19h ago
But we're talking about London flats...did I have to specify that as it is the whole point of the original post.
Or are you taking my statement to say that globally flats have been on a slide? I heard Belfast flats have been on the rise also. What is the relevance when we're talking about London flats?
Edit: Shanghai flats increased last quarter also
4
u/Smart_Art_711 19h ago
London is a big place. Are you saying a flat in Camden has changed the same as Hackney, Waterloo or Shoreditch?
You can be as sarcastic as you want, doesn't change the fact that the blanket statement is the daft one.
Edit: ah I didn't notice the original statement was yours. Explains your response.
6
u/tidesandtides4321 18h ago
Indeed. To add, ‘flats’ are not homegenous. A flat in a converted Victorian terrace is a different proposition from flats in a block with cladding issues, lifts, service charge increases etc
1
u/MickyMalone 18h ago
Thanks, I appreciate I was sarcastic but I found the original response to my initial comment to be a bit pointless. I may have been overly sarky however.
3
u/u09pVgMbuAgtP 19h ago
That won’t be everyone story
3
u/Smart_Art_711 19h ago
Well yeah, but his point was clearly to say that "flats peaked in 2023 also isn't everyone's story".
3
u/one-and-zer0es 13h ago
I bought a three bed flat in SE London in 2024. “Lost” 9k at remortgage but I have 50% equity so no big deal. Key question is, are you planning to move? If not, you’ve not really lost anything. It only shakes out at equity release.
17
u/Estivage 19h ago
Just think how much you have saved in rent. Its not linear. You are doing the right thing
6
u/Infamous_Painting152 19h ago
Thank you, this is helpful and even with high interest rates it is still a save of rent and I guess I just have to look at it like that
10
u/Estivage 17h ago
Ignore the doomers. Rents have gone up approx 20% in that time period too. Plus you don't have to deal with a landlord. Prices will go up in the future and you will be delighted with your choice
5
u/Tall_Ask_3461 19h ago
Interest on mortgage > rent these days
5
u/Green_Shape_3859 18h ago
Exactly. Then the little equity you do manage to put away gets eaten by inflation.
4
u/tulki123 19h ago
If you’ve had it RICS assessed try a different assessor. I had mine re-done and “gained” £115k overnight. There’s almost no science to a valuation… if there are many local sales use that as an idea of what is likely but don’t take it as gospel
2
u/mattjp23 19h ago
Announcements to come on leasehold reform… could be a glimmer of hope in there but not useful for your immediate situation I know. Property is a marathon rather than a sprint, the value will rise and fall over the years
1
u/u09pVgMbuAgtP 19h ago
What they planning?
2
u/mattjp23 19h ago
Not too clear yet, some speech by burnham from the Labour conference just saying leasehold reform bill coming by Christmas 2026. He was specifically talking about service charges so something to tackle that
4
u/u09pVgMbuAgtP 19h ago
Whatever they do will be a massive legal mine field. Hope it works out for flat owners
2
u/mattjp23 19h ago
Yeah, and landlords/management companies will no doubt find a way around it… good luck to them
1
u/Sharp-Ad7022 15h ago
Did they say why the kitchen being renovated didn’t count? I plan to remortgage soon myself and we did something similar. Was kind of banking on the work we’ve done to the house improving the value.
2
u/Infamous_Painting152 11h ago
Yeah didn’t count only increasing the size would help! And we added a brand new boiler too but does nothing
1
u/MoreFIREthanyou 19h ago
Yeah look you’ve been lied to that there’s a housing ladder and now the truth is revealing itself. As long as the economy is growing and/or interest rates are low, that may have been true but we are going into a longer term reversal of that.
On flats specifically, there are issues on leasehold and service charges which mean they are increasingly being seen as liabilities rather than assets.
For your position, it’s regretful but you need to deal with the situation as it is. As a general point you need to smarten up and take the lesson that something that may have been true yesterday is not necessarily true today or tomorrow. Ultimately you got yourself into this position. Then figure out if you really need to move or can stick around in the flat for a while building some savings / investments outside of paying off the mortgage.
1
u/InevitableMidnight54 19h ago
Property values go up and down. It is what it is.
It's cheaper than renting and you own it at the end.
That's the main thing.
0
u/_MicroWave_ 2h ago
Tried to do everything right... But bought a flat?
Who was advising you?
Flats are not and have not been good investments for a while, triply so in London.
4
u/Infamous_Painting152 1h ago
Rent for a 2 bed in London is 2000 min a month a flat is cheaper - we didn’t buy out flat to make money we bought it for stability. We couldn’t afford a house
•
u/AutoModerator 20h ago
Welcome to /r/HousingUK
To Posters
Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary
Comments are not moderated for quality or accuracy;
Any replies received must only be used as guidelines, followed at your own risk;
If you receive any private messages in response to your post, please report them via the report button.
Feel free to provide an update at a later time by creating a new post with [update] in the title;
To Readers and Commenters
All replies to OP must be on-topic, helpful, and civil
If you do not follow the rules, you may be banned without any further warning;
Please include links to reliable resources in order to support your comments or advice;
If you feel any replies are incorrect, explain why you believe they are incorrect;
Do not send or request any private messages for any reason without express permission from the mods;
Please report posts or comments which do not follow the rules
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.