Sunday, Apr 25, 2010
Pile in, kids
The Times: How to ride the property boom
They can hardly believe it themselves, but estate agents and mortgage brokers are agreed: the property market is booming like it’s 2007 again.
Now funds are giving investors access to the top end of the market without the need to buy a home. Hotbed raised £3m for investment in the London Central Portfolio (LCP) fund, which specialises in property within a radius of six miles around Hyde Park. It is targeting a 15% yield. Hotbed said "A year ago there was no way we would have gone into it but the world is good again. It took us just two weeks to raise this money"
Posted by little professor @ 12:05 AM (1627 views) Add Comment
11 Comments
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1. fallingbuzzard said...
I don't know why they try and disguise and interest rate bet as a property fund
2. tenyearstogetmymoneyback said...
I don't think £2 million would get you very far near Hyde Park (2 houses ?)
I thought the idea of a fund was to spread risk over lots of holdings.
3. righttoleech said...
it ticks all the boxes, greed, avarice and brain dead
4. mrflibble said...
You cannot go wrong with bricks and mortar... Guaranteed in the UK... Those Limies with do anything to maintain prices... Sell the grand kids into slavery? No problem...
5. doomwatch said...
I hope that dirty bomb doesn't go off in the middle of the over priced London 6 mile radius. This article makes me sick to the stomach.
6. Alan Lubin said...
try raising £3m for a technology based start-up in this country though. we are getting our arses kicked by the rest of the world because, despite having some of the brightest people around with some world beating ideas, money is still getting shovelled into this sort of madness.
7. Catmandu said...
If it seems too good to be true, it probably is too good to be true.
8. Zeus said...
The Average House Price [Nationwide figures] in 1987 was 40k, in 1997 it had increased to just 55k.
[33.3% Increase over ten years]
From 1997 to 2007 House prices rose from £55k to £190k
A staggering 245% increase!
{Now look at the average wage increases from the office of national statistics.}
Comments from Mortgage brokers and Estate Agents' are pure manipulation.
No FTB I know can, or will, be buying until the average house price returns to 3.5 x the average salary.
{Not of a couple, but of a single Individual.}
A 50% to 60% drop in the price of an average house, from peak valuation, is extremely likely to happen.
9. drewster said...
These types of funds are a guaranteed way to lose money. The spreads are horrific and if the market turns down your money is locked up for months or possibly years while they try to sell the properties.
When house prices rise, commercial property (offices/shops/warehouses) tends to rise too. Both are underpinned by rising land values. You can get into commercial property simply by buying shares in specialist companies known as Real Estate Investment Trusts (REITs). The top ones in the UK are:
- British Land
- Hammerson
- Land Securities
- Liberty International
- SEGRO (formerly Slough Estates)
- Great Portland Estates
- Workspace Group
If, like the original Times article, you're only interested in investing in "prime central London", then Great Portland Estates fits the bill quite nicely. Disclaimer: I'm not a financial adviser, do your own homework before buying anything.
10. mr g said...
From the article: Martyn Smith of L&G said: “Ditching credit scoring is an innovative, back-to-basics way of looking at lending.”
One word describes this guy: t**ser.
@Doomwatch "I hope that dirty bomb doesn't go off in the middle of the over priced London 6 mile radius."
That sort of thing never happens to people in ivory towers (I'm not wishing it on anyone, by the way).
It's always Joe Public who gets hurt, be it by terrorism, politicians, bankers etc.
11. icarus said...
The weak £ attracts foreign, tax-avoiding kleptocrats to prime London property and "the world is good again". If it's so good why not invest in productive trade and industry instead of in assets which are already in place?