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  1. New horizons for first-timers Rebecca O’Connor on the temptation of foreign property for those priced out of the UK market First-time buyers are being targeted by a growing band of property experts who claim that anyone priced off the ladder in the UK should consider buying cheaper houses abroad, in locations such as Poland, Turkey or even India. A new website, www.from55k.co.uk, from Parador Properties, one of the biggest British-owned property companies in Spain, promises aspiring homeowners the chance to buy a new two-bedroom apartment abroad for as little as £55,000. Another website, www.newskys.co.uk, also offers first-time buyers an overseas service. A survey by YouGov, the polling company, shows that nearly half of 18 to 29-year-olds plan to buy abroad, and two thirds of these say that this would be their first property purchase. The idea is alluring. This week the Royal Institute of Chartered Surveyors reported that some European housing markets enjoyed double-digit growth last year despite interest rate rises. An added bonus is that a plush flat in a sunny location could also bring rental income from holiday-makers, as well as providing a getaway destination. Jonathan Burridge, of Quantum Mortgages, the mortgage broker, says: “This is still a relatively new concept and, as a pioneer in new territory, you can expect to meet bagmen and cowboys. However, there is gold to be had for the wise and the lucky.” But experts advise that buying overseas carries a host of unpredictable risks and costs. Ray Boulger, of John Charcol, another mortage broker, says: “I am not surprised that overseas consultants are targeting first-time buyers — the low prices look appealing. But for most first-time buyers, buying abroad is wrong for so many reasons that it is difficult to know where to start. The biggest mistake is assuming that the overseas market will perform in the same way as property in the UK.” There are predictions of a threefold increase over the next ten years on property in Prague and reports of high demand in Bulgaria. But Mr Burridge says: “This is speculative. The marketing literature looks attractive, but has yet to be proven right.” An important consideration is the property rental market in the country in which you are buying. A strong rental market can mean weaker capital appreciation. Residents in France, Germany, Italy and Spain traditionally rent their homes. A flurry of foreign investment pushed up prices for a while, but the market is not driven by a homeowning culture over the long term, as is the case in the UK. Even if the purchase price looks cheap, the initial costs of buying abroad are likely to be higher than in the UK, especially legal expenses. Mr Boulger says: “Legalities vary from country to country and prospective buyers should never sign anything they do not understand. This may mean hiring more than one solicitor, who will have to put in more work, which will mean higher fees.” Stamp duty is also likely to be higher abroad — in some countries it is as much as 10 per cent, compared with 1 per cent for the average first-time purchase in the UK. Despite ultra-low prices, particularly on new-build apartments, buyers should be aware that prices when they sell may not be as high as they had hoped. For example, the Spanish new-build market is active, but selling on apartments is becoming more difficult, meaning that sellers are having to accept lower prices. This could be a problem for those hoping to use the profits for a deposit on a home in the UK. Mr Boulger says: “If the purchase does not go well and you fail to make a profit, this may scupper plans to buy in the UK.” If you keep the overseas property while buying in the UK, it may be harder to find a willing lender because other mortgage commitments will be taken into account when deciding what risk you pose and how much you can afford. Anyone convinced that buying abroad is for them should do some research. Mark Bodega, of HIFX, the currency exchange company that spe-cialises in overseas property purchases, says: “Nothing beats pounding the pavements. Look at the rental income generated by similar properties in similar areas. Target places that you can rent out year-round, such as European cities, and note how easy it is to get there.” CASE STUDY: Nice price for Italian townhouse Julie McIntyre rejected the £160,000 two-bedroom semis in the South East in favour of a 100-year-old townhouse with two roof terraces in Puglia, Italy, for €66,000 (£43,480). The 27-year-old sales executive, who cannot afford to buy in her home town of Maidenhead, paid a €17,000 deposit for her townhouse. Although the upfront fees were more than she would have paid in this country, the mortgage repayments on her Woolwich loan are much lower, at €2,045.41 (£1,348.44) every six months. “This investment has given me a good balance,” she says. “I get on to the property ladder, I can afford the mortgage without rental income and I get a holiday home.” The do’s and don’ts of buying abroad DO calculate the costs. Even if the property is cheaper, fees and deposits can be thousands of pounds higher. DO seek advice from UK-based specialists in buying abroad, such as Conti Financial Services (www.mortgagesoverseas.com). DO compare mortgage deals from UK lenders, such as Barclays, NatWest, Norwich & Peterborough and Leeds & Holbeck building societies, with those from foreign lenders, such as Crédit Foncier in France. Foreign lenders sometimes offer better rates, but are less convenient. DO arrange a mortgage in principle before signing any contracts and ensure that there is an opt-out clause if the mortgage falls through so that any deposit is refunded. DO use specialist brokers, such as HIFX (www.hifx.co.uk) or Currencies Direct (www.currenciesdirect.com), to transfer large sums into another currency. They fix the exchange rate and can save you thousands of pounds in fees. DON’T believe the hype. Visit the location and speak to other UK investors before buying. DON’T rule out buying in the UK, if you can. It is still a less risky option. Scottish Widows, Standard Life and Accord offer professionals 100 per cent mortgages, and in some cases lend 110 per cent of the property value to help with costs. 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  2. Bullocks mate. Been in Miami recently? Loads of new blocks with beautiful views of Brickell Bay and no tenants for the BTLers who bought them off plan. Values are through the floor from what I was told. Same in Naples Bay, a very wealthy bit of Florida-I have an aunt with a flat there that luckily they bought 15 years ago. Values are down 30% according to her. S.
  3. Shocking and ultimately unproductive for the country I agree but to be fair, what car industry? S.
  4. Hezaa, Feck me are you pompous? Also, we all know this would still get an "A" grade at A level these days. I got an A in history A level back in 1984 when they really meant something... S.
  5. To be fair, GB has tried to give people the impression they will not fall. But he lied... he cannot control boom and bust.
  6. "consumer confidence wabble" - not meant to be taken seriously I suspect... S.
  7. Agreed on all points! Brown, Balls and Livingtone all financial retards...then again why limit it to "financial." S.
  8. What sort of insurance? Credit? I doubt the banks are especially worried about their home contents...
  9. That is a bit broad-hedge funds were never regulated particularly in the UK but banks, insurers etc are regulated into the ground and have been for a long time. S.
  10. "Joey" anyone? Oh no, Tacoma beat me to it... S.
  11. As our debts pile up, it's too late for Brown to get out in time By Jeff Randall A culture of bullying and harassment is driving staff out of Gordon Brown's Treasury, according to a report by the aptly named consultancy, Talent Drain. As disaffected civil servants emerge from the Chancellor's dungeons, blinking in the Whitehall light, they'll discover an unfortunate truth. For millions of hard-working people, it's just as bad out here as it is inside Gordon's grotto. Of those quitting the Treasury, nearly one third cited "low morale". Hey, welcome to Brown's world. Come walk a mile in our shoes. The Chancellor has been bullying and harassing decent taxpayers for 10 years. While you Treasury chaps have been helping Mr Brown churn out new rules, regulations, red tape, benefits, handouts and subsidies, with Stakhanovite efficiency, the rest of us have been toiling to make sense of it all and pay for his budgetary incontinence. The survey reveals that two thirds of Treasury staff quit within two years of joining. Millions of other over-burdened souls would dearly love to leave behind the Clunking Fist so easily. advertisementIn his early days at Number 11, Mr Brown rightly observed that there are two types of chancellor: "Those who fail and those who get out in time." He invited us to infer that he'd know when to go. Many of us thought that he'd crack it. We were wrong. As the longest-serving chancellor of the modern era, Mr Brown has left it too late — far too late — to escape the flames of public opprobrium. Incendiary facts are now burning through his record. He's not going to get out in time. And neither are we. Mr Brown's style is to control all levers of power. This means micro-managing every detail. It would be no surprise to learn that he chose the colour of the Treasury's lavatory paper. Unfortunately for Mr Brown, the one thing he can't control is the timing of his ascent to Number 10. That's in the gift of the second-hand car dealer, next door to whom he has been living since 1997. By the time Tony Blair finally allows the Chancellor to become Prime Minister, Mr Brown will already be the Prime Suspect. His alleged crime? Trading under false pretences as a successful keeper of the country's coffers. What the Chancellor has done to our economy is mirrored by the behaviour of many Britons who have been encouraged to live well beyond their means. Debt — mountains of it — has underpinned Mr Brown's growth story. Any fool can over-borrow and live, briefly, a fantasy existence. Indeed, in today's consume-now, pay-later culture, many fools do. That includes Mr Brown. Debt is the new junk food. We know that an overdose is bad for us, but we're lovin' it. Dreamers acquire s*****y houses, drive luxury cars and take exotic holidays — all on credit. They have it large. For a while these big spenders impress others, and perhaps themselves, that they're living like millionaires. Chancellors, too, are seduced by the feel-good factor. The wine flows, the music plays and the dancing goes on for ever. Except that it doesn't. Last year, more than 100,000 Britons became insolvent. Rising interest rates, rising unemployment, rising taxes and rising fuel bills shattered the illusion. Bailiffs gatecrashed the party. At least as many people, probably more, will go bust this year. Brown's Britain is in a similar position. He is borrowing upwards of £35 billion a year to keep the show on the road. He has blown our savings on unreformed public services. Last year, he spent £169 billion on health and education alone. Yet hospitals are closing and nurses are being sacked. In our schools, once you strip out the fiddled examination results, it's clear that standards of literacy and numeracy remain shamefully low. Mr Brown's growth "miracle" — 38 consecutive quarters of expansion — is nothing of the sort. It has been manufactured by a public spending binge that will inevitably end in tears, because the Chancellor is running out of money. He boasts about soaring employment, but the increase in jobs is largely accounted for by a ballooning state payroll. From 1991 to 1998, public-sector employment fell every year, with an overall reduction of 816,000. Since Mr Brown decided to create a client class of state-funded workers (with mink-lined pensions), public-sector employment has grown like a Russian vine. By June 2005, there were 680,000 more public-sector jobs than before Labour was elected. This helps explain Britain's poor productivity performance: all those diversity officers (the BBC's is paid about £90,000 a year) make a lot of noise, but not much else. The late, great Lord Weinstock told me that when he saw a company's profits rising, but cash balances falling, he had learnt "to become suspicious". We should be equally sceptical about an economy that, after 10 years of apparent boom, is mired in personal and public debt. If we can't reduce borrowings when, allegedly, we've never had it so good, what chance of balancing the books when bad times arrive? If this is prosperity, where has all the money gone? Answer: funding low-productivity activity. So desperate is Mr Brown to hoover up private assets to pay for public excess that he raids our pension funds for more than £5 billion a year. At the same time, his Byzantine benefits system is over-paying claimants by about £1 billion a year. It's his very own version of Gresham's Law: bad money drives out good. In terms of reputation, Mr Brown will soon join the growing list of bankrupts — Mr Blair, the empty suit, will see to that. The Prime Minister has, in effect, what the City calls "a put option" on his Chancellor. He knows that, the longer he hangs on, the worse the British economy becomes. Mr Blair will hand over the keys at the point of maximum pain for Mr Brown. Professor David Smith of Derby University, a former City economist, says that Mr Brown will face "the worst structural fiscal deficit of any incoming prime minister since 1979 or possibly 1974, but has only himself to blame". Amidst this financial carnage, what are the Conservatives doing? Not a lot. They're too busy wittering on about stability, as if promising to maintain Labour's fiscal imbalances is somehow evidence of a responsible future government. Very rarely, perhaps once in a decade, an opposition party is presented with an open goal of such magnitude that it would be politically negligent not to score. That moment has arrived. Mr Brown's plundering of our private pensions has no worthwhile support beyond the Treasury. Not in the North or South, among Left or Right, rich or poor. Nobody in their right mind thinks it's a good idea to wreck a retirement system that was once the envy of less fortunate nations. So, George Osborne, shadow chancellor, the goal is wide open. Even a one-legged man in a ballet shoe could smash the ball in the net. Why don't you promise that, given the chance, the Tories would stop the robbing of our pensioners?
  12. Yes, one quarter point rise, inflation is over and we can all go home...
  13. You should buy some more BTLs before they are all gone!
  14. House prices to rise despite rate move By Caroline Muspratt Last Updated: 1:10pm GMT 22/01/2007 UK property website Rightmove is sticking to its forecast that house prices will increase 6pc across the country in 2007, despite the shock increase in interest rates this month. The amount of properties up for sale is at its lowest for three years and 18pc down on the level of January 2006, helping to lift average prices 0.5pc so far this month, the website said today. The comments from Rightmove echo that of some mortgage lenders and homebuilders who expect a general shortage of housing to more than compensate for higher interest rates. Miles Shipside, Rightmove’s commercial director, said: “Where there are shortages of property, prices will keep increasing and properties will keep selling, in spite of the latest interest rate rise.” The Bank of England earlier this month moved rates up to 5.25pc and expressed concerns that inflation will accelerate. The Bank’s fears were confirmed last week, when a report revealed that inflation hit 3pc in December, the highest level for at least a decade. The minutes of the meeting at which the Bank’s policy makers made its decision will be released on Wednesday and closely watched for any signs that rates may go up again. Rightmove said that increases in London helped lead a 13.5pc increase in the cost of an average home in the last 12 months. The average price rose to £222,859 in January. In London, the average asking price of a property rose 22.4pc over the past year to £356,192, a record level. Rightmove said: “House price rises in London are outperforming the rest of the country to such an extent that the average increase in 2006 alone in London’s top five performing boroughs now exceeds the total value of an average property for sale in England and Wales.” The biggest increase was seen in Kensington and Chelsea, where the average price rose 61.8pc to £1.15m over the past year. Mr Shipside did warn that further rapid increases in interest rates is “a high risk strategy for the economy given the possibility of rates going too high.”
  15. To be fair, I am the one questioning their superior technology and business skills, not the journalist. I agree with other posters-it will all end in tears. Anectdotally, the Irish are big property investors in the Uk perhaps based on MEW from overpriced Irish houses. S.
  16. So Ireland now has a higher average income than the Uk or US apparently. Is this down to their superior technology or business skills? Unlikely. Mostly it seems to be down to a low business tax regime (that the UK could do with with) and above all even worse house price inflation that the Uk, in other words illusory money. Luck of the Irish pays off big time By Tom Peterkin The Big Issue seller standing outside a newsagent in a seaside celebrity hideaway was singularly unimpressed by Europe's most spectacular economic success story. His reaction to the news that the Irish were now officially among the world's richest people was unprintable. As a purveyor of the homeless magazine in affluent Dalkey, the Dublin suburb where Bono, Enya and the film-maker Neil Jordan live, he was only too aware that the Celtic Tiger has yet to bestow its largesse on him. Dublin’s seaside suburb of Dalkey, home to Bono and other celebrities, is one of the more obvious signs of Eire’s new found affluence, but huge inequalities remain Others have been much luckier, as the spiralling prices of the handsome homes overlooking the sea and their occupants' multi-million euro bank balances testify. The transformation of Ireland from a rural backwater to an economic powerhouse where big business and the developer reign supreme has been truly remarkable. The latest extraordinary chapter in this fiscal renaissance has seen the once downtrodden victim of famine and mass emigration, recognised as the country with one of the highest incomes per capita in the world. When that particular measure of wealth is used, Ireland sits at the very top of the international league table, according to a report by Standard & Poor, the respected provider of financial intelligence. advertisementSurpassed only by tiny financial centres such as Bermuda and Liechtenstein and the oil-based economies of Qatar and Norway, Ireland comfortably outperforms the United States and Britain. Recording an income per head of £28,917, Ireland beat the US (£23,144) and comfortably saw off Britain's figure of £20,714. "It's great, isn't it," said John O'Brien, a green-grocer taking a break from serving the well-to-do customers taking his wares home in their Chelsea tractors. "Everybody's making millions. But I seem to be working harder and harder. Everyone else is cleaning up, though. It is great to see people doing well. But the people who are making the real money are the property speculators." His last point was borne out in the windows of the local estate agents where even quite modest dwellings were on sale for more than a million euros. "The chattering classes, who own property, are thrilled by the values," said Tom O'Higgins, the owner of Remax Property Choice estate agents. "I am lucky enough to live in Dalkey, but I happen to have a large family of eight kids. Unfortunately there is no way they are going to be able afford to buy a house near their family. We are going to have to come to terms with the social consequences of this property bonanza." Economists believe low taxation policies, generous payments from the European Union, increased stability in Northern Ireland, American investment and a highly skilled, but relatively low-cost, labour force have encouraged the boom. But another questionable side-effect has been the failure of Ireland's infrastructure to keep up with large scale construction projects and a resurgent population. For those reluctant to join the ever enlarging helicopter owning set, the congestion on the roads can be infuriating. The government has embarked on a huge road-building programme, but it has yet to catch up with the exponential increase in car ownership seen over the past decade. "Given that we are supposedly so well off, they are not looking after the people," said Catherine Dunne, a worker with Credit Union, the community financial co-operative. "There are still huge inequalities here and the health service here is not good enough. Public transport is a joke. There are a lot of things that have to be done. Things are still too ad hoc." The soaring prices were the main issue for Nicola Byrne, 20, a student living at home. "Everything is so expensive. I work in a shop to make ends meet, but I still find it quite difficult to afford a social life," she said. But for others, the reversal of decades of economic stagnation that forced so many Irish to make a living abroad, is to be welcomed. The declining population has been replaced with one in which under-45s make up 66 per cent of the total. Last year 70,000 people moved to the Republic of Ireland and the population currently standing at 4.3 million is expected to top five million by 2016. "Ireland has changed radically over the past 16 years," said Ian McCarthy, the managing director of the estate agents Sherry FitzGerald. "We have changed from a country that people have traditionally left, to one in which people are now returning in their droves." The downside, according to Luis Gonzalez, a Venezuelan who now recruits pupils to the Rockbrook private school nearby, has been a change in attitude. The rustic, laid-back charm so long associated with Ireland was in danger of being superseded by a "greed is good" mentality. "People are much more worried about material things than they used to be," he said. "The pressure to do well is much higher. It is beneficial on the whole, because people that have a job can do well. But it is a two-way thing. Ireland seems to be going down the American route of consumerism. It has changed so much."
  17. So when you say you are a bloke's bloke, you prefer blokes? Go for a drink with the one who wanted to buy you a drink, make his day...
  18. Don't believe you-why so complicated? What qualifications, study, length of traing are required? S.
  19. That is a fantastic salary for a job that requires little or no skill. Can't we replace them all with Poles who would do the job better for less? I suspect most Poles in the UK could speak/make announcements in more comprehensible English than some of the blokes on the Jubilee Line. S.
  20. Maybe/probably many of the recent BTLers bought off the old hands getting out of the market and they will have made not much capital gain in the last year, especially after CGT. As for a 4-5% yield, not only is it probably less than mortgage cots, maintenance, voids etc but you can almost get that for virtually no risk from a web savings account, the difference being you will only gain on money you actually own, not borrowed cash. Barking financial decision to my mind but I know a couple of people who have bought BTLs for the first time in the last year. They are optimistic but optimism will not save them from losing money... S.
  21. My favourite line was "give me some speram " (Anna). I have been using that all morning... S.
  22. Overvalued house prices threaten crash By Edmund Conway, Economics Editor Last Updated: 2:25am GMT 02/01/2007 House prices are at their most overvalued for 15 years, new figures showed yesterday, as hard-pressed home-owners struggle to pay their mortgages. And with the gloomy prospect of a record tax burden and unprecedented rises in household bills comes a warning that interest rates could rise by far more than expected. Morgan Stanley and PriceWaterhouseCoopers warn there is a high chance of a severe fall in house prices in the coming years A study commissioned by The Daily Telegraph shows that house prices are moving well beyond the reach of many families as the rapid growth in property values outpaces increases in incomes. The Daily Telegraph/Lombard Street Research Housing Affordability Index shows that they are more overvalued than at any time since 1991 — when prices were plunging after the last major slide. Affordability has fallen by three per cent in the past nine months, and almost a fifth in only four years. The affordability barometer, in which 100 points represents the average expense of house prices since the early 1960s, is now at 94.3 points. advertisementHouses become less affordable when prices rise faster than earnings. A rise in interest rates also makes life more difficult and all of these factors are taken into account in the research. The figures coincide with a warning from one of the country's leading economics experts that interest rates could rise by more than one per cent to more than six per cent within 18 months. This comes days after statistics showed that the average homebuyer is borrowing 6.5 times their salary when taking on a new property. The investment bank Morgan Stanley and the consultants PriceWaterhouseCoopers warned that there is a high chance of a severe fall in house prices in the coming years. Prices rose sharply over the past decade, sparking fears that, when families realise they cannot afford to a new home, the market could be badly hit, with knock-on consequences for the rest of the economy. But many first-time buyers, whose numbers are already at record lows, will still be prevented from taking their first step on to the housing ladder this year, since prices are unlikely to stop rising in the near future, Lombard Street Research (LSR) warned. The analysts were the only major forecaster to predict correctly rapid house price inflation of almost 10 per cent in 2006. An LSR economist, Diana Choyleva, said she thought prices could rise by as much as 15 per cent in 2007. But she warned that if the Bank of England did not prevent people taking on excessive debt by raising interest rates, it risked laying the foundations of another major collapse. "The Bank could risk finally spawning a house price bubble in 2008," she said. "Our affordability indicator extended its fall in the third quarter of 2006 and is likely to have declined further in the fourth quarter." Mervyn King, the Bank's governor, said last May: "Relative to average earnings or incomes, or anything else you could look at, house prices do seem remarkably high." Since then, prices have risen further still, making it likely that the Bank will be wary of encouraging people to take on more debt. Prof David Smith of the University of Derby, the chairman of the "shadow" monetary policy committee, has predicted that — far from falling later this year as many City experts think — borrowing rates could rise from their present level of five per cent to reach 6.25 per cent midway through 2008. The prediction will come as a blow for households, many of whom are already struggling to meet their monthly mortgage payments and other bills. Prof Smith said he feared the Bank would take this decisive action to take control of the burgeoning level of personal debt, which has now passed £1,300 billion. This, and the likelihood that the pound could fall against other currencies, could force it to raise interest rates. "The MPC [Monetary Policy Committee] will be batting on a very sticky wicket over the next few years," said Prof Smith. "Rates are expected to end 2007 at 5.75 per cent, and rise to 6-6.25 per cent in 2008." He said that the Bank had left interest rates at too low a level for too long and would soon have to face the consequences. He predicted another year of rising house prices, but warned that as borrowing costs become too great for many families, the market will slow dramatically, before going into reverse in 2009.
  23. Happy New Year to you too! I know what you mean but it seems to nod to Bootle's recent fence sitting article. It is fairly unequivovcal in saying it will burst rather than plateau or go on forever... S.
  24. What no comments? I thought it was a great article to end the year on...
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