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brolly

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About brolly

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  1. I'm about to move to Berlin, so quite interested in the German market, although I'll be renting for a while at least. Unusually, the German property market doesn't appear to have had any real-terms boom at all, according to a land registry survey. I may well buy in Berlin, but since I'm moving there, not investng, it'll be a year down the line at least while I find my feet. In terms of buying as an investment, it's worth bearing in mind that Berlin is a pretty poor city, with high unemployment. I hear that it has had a lot of government subsidy but essentially whilst it's cheap compared to England there is much less scope for capital appreciation and therefore you must make sure that you can achieve a good yield on your investment. Rents in Berlin are correspondingly low compared to the UK and are subject to rent controls. It's also worth noting that the German letting market is much more regulated in general than the UK one and leans much more in favour of the tenant. Tenants actually still have rights in Germany! If you're buying a flat - most places I have seen in central Berlin are purpose built apartment blocks - it's worth finding out if you are going to get hit for the communal service charges. If a roof needs replacing for instance, then all owners of flats in a block are compulsorily liable, which can cost tens of thousands of euros. Another thing, that you've likely already discovered is that LTVs are much lower in German mortgages. You will often need 30 - 40% deposit. So there are reasons why Berlin property appears so cheap. They're some of the same reasons that make Berlin a very cool and cultural city - it hasn't been in the grip of a turbo charged form of capitalism in quite the same way as capital cities like Paris or London. It's one of the reasons I'm moving there. As a long term investment, it's probably a good idea. Berlin is a great city and has huge long term cultural and geographical potential, but if you're looking to make a quick or easy buck, it might be worth looking elsewhere.
  2. Yes. 'Cos it appears to reward profligacy and greed.
  3. Found this link posted on the news blog: Der Spiegel Article It's a good 'un, so below is a translation I made. It's a bit clunky, I'm afraid - like my German, but I think the sense is roughly right. ----- Homeowners in trouble, markets in turmoil: The crisis in financial markets is entering its second round - and this one could be worse than the first. In Britain, tens of thousands, in the US, hundreds of thousands of families fear repossession. Difficult weeks prevail too in stock markets. Hamburg - Poor British: In the credit and property crisis, there are tens of thousands worse off than ever before. In the mortgage credit market, a time bomb is ticking - diagnosed the London Times at the weekend. The reason: Many homeowners with medium or weak credit-worthiness are having to prepare themselves for drastic rises in interest rates. In 2005, mortgage banks were still tempting financially weak customers with two year fixed interest rates of 6.6%. That low interest period is now over: in the coming months, a hundred thousand Britons will be moved up to interest rates over 10%. On a £150,000 mortgage, the monthly interest repayments will grow by somewhere in the region of £300. For many families, this will spell financial disaster. The only way out: foreclosure. Already signs of the crisis are easy to find in the British property market: the number of new mortgage approvals in October has fallen by 44,105, according to banking alliance BBA - the lowest level since 1997 and 37% lower than in October of the previous year. The ice-age in the property sector might also affect private consumption. Less and less Britons are taking mortgages out, to finance large purchases. Many analysts believe that the BoE should lower interest rates in December to improve the situation. US housing: 2008 - nearly 1.5 million foreclosures expected. In the American housing market, the situation is similar: The cases of foreclosure and payment-defaults may yet again significantly rise, as there are already automatic interest rate rises in the pipeline from many mortgage lenders. Alone in the next year this low-security credit is of the order of 362 billion dollars, reports the Wall Street Journal in a call for data from Bank of America. This would herald a further spiralling downwards for the entire property and credit market. According to estimates, in this year alone, 1.35 million US homes would be repossessed, and a further 1.44 million in 2008, around a half as much again as in the previous years. The American economist Michael Burda warns of a severe economic crisis in the USA. "The country is stuck in a dilemma. I expect a deep recession", the Professor of the Berliner Humboldt Univeristy told Der Spiegel. "If the crisis reaches still further in the coming years, measures may be adopted like in the World economic crisis of the 1930s" The consequences of the credit-malaise will also be felt in the middle of Europe. The Swiss central bank also stressed that the situation in financial markets had become significantly tighter since August. "I think the situation is very serious" said SNB vice president Phillipp Hildebrand in Sonntagszeitung (Sunday paper). "We are experiencing a second wave of crisis symptoms in the credit markets". In many respects, they will be worse than the first wave of 9 August, when the Federal Reserve appeared forced to inject 24 billion dollars into the US banking system. "The crisis has got significantly worse", said Hildebrand. Prognosis for the DAX is tentative - financial futures under pressure. The nervousness may in coming weeks penetrate the German stock market. "The mood has noticeably darkened", write analysts for the Berlin Landesbank (LBB). There are a multitude of debt factors - for this reason, the bank has reduced its prognosis for the DAX at year's end to 7250 points. Also, Markus Reinwand of Helaba reckons there will be some to-ing and fro-ing in the short term. More corrections shouldn't be ruled out. Suffering may once again be the nature of financial futures. After the countless financial companies like Swiss Re who have admitted ever bigger debt burdens, the mistrust of the whole industry is growing."In the meantime, banking and insurance are under general suspicion" said LBBW analyst, Michael Köhler. In Germany, the rapidly sliding(?) middle-sized bank, IKB wants to present its postponed half year accounts. Also, the climbing Euro is pressurising sentiment. The common currency has reached a new record high almost every day last week and the last one, just below the important $1.50 mark. "Because of this massive climb, Germany the world export leader is particularly severely affected", wrote the LBB analysts. (edited for URL)
  4. The percentage is usually worked out as an average of all four agents that are represented on the Haart website, not just Haart itself. That said, it's definitely heading in the right direction. A big jump into double figures.... Haart 1756 / 15700 - 11.2% Felicity J Lord 80 / 1008 - 7.9% Spicer McColl 499 / 4995 - 10% Darlows 291 / 3127 - 9.3% Average 2626 / 24830 = 10.6%
  5. The proportion of price reductions has remained pretty steady lately, but the number of homes for sale has gone up drastically. Up 30% on this time last year and up 10% on this time last month!
  6. It's not written to stir up trouble. I'm genuinely dismayed at the heat immigrants are taking for the trouble in the economy. To my way of thinking, middle class BTL landlords, aided and abetted by rampant free-market capitalism have driven house prices out of reach. This is not essentially an immigration issue. Socialists as I recall, believe in fairness and social justice with a greater or lesser emphasis on wealth distribution. Manouevring the market in to the hands of the few is no more a socialist policy than New Labour is a socialist government... If the rights of tenants hadn't been permanently stripped away in the 1980s, then renting would not be a life that you were subjected to, but perhaps one you could take advantage of. Take Germany's example where around 50% of the population are perfectly happy renters.
  7. I find it sad that a forum about house price inflation should have a rightwing bias so strong that it sometimes borders on extremism. Is this not just another extreme effect of the divisive effect of HPI on society? Is this not just scapegoating? An attitude that says 'I'm p*ssed off I can't get a house, so blame it on the immigrants for stealing our houses as well as our jobs and women.'? Is the housing bubble not caused by a move rightwards, economically speaking - away from a socialist model to one of rampant free market speculation? From anecdotal experience, I see immigrants generally at the poor end of society doing the underpaid jobs we would rather not be doing ourselves. I am saving my frustration for the people who are really responsible for this situation. They are almost exclusively educated, wealthy and white.
  8. Likely or not, if that were to happen, our society would rapidly become one that's not worth living in - on either side of the rift that would inevitably divide it. That's when it's time to up sticks and move to another country permanently.
  9. Lobby for legislation to be put in place so that it doesn't happen again?
  10. The lending laws in Germany are also nowhere near as lax as in the UK. 20% equity is usually required to get a mortgage - although for someone who earns their income in the UK, it's likely to be more like 40%. Factor in unemployment in Berlin at over 17% (as of June 2006), renting laws that lean heavily in favour of tenants - sitting tenancies are the norm - and it doesn't seem like such easy money. Despite (or maybe because of) its economic woes, it is a very cool, cultural city. It feels distinctly un-rat-racy and certainly has a bright future. It would be a terrible shame if it was turned into Das Buy To Let by a bunch of wealth obsessed UK speculators.
  11. All the buy-to-let books on Amazon have price reductions of around 30%.
  12. Might as well stop being a lurker to answer this!.... During the slow down in HPI in early mid 2005 (when this thread was started), the number of homes for sale on Haart (and associated EA websites) went up steeply. More importantly, perhaps, the percentage of those that were advertised as price reductions increased enormously. At the height of the slowdown, when London and South East prices went into reverse for a short time, there were around 9000 homes for sale on Haart, 17% of which were price reductions. These freely available statistics could be seen as a bellwether for any impending housing slowdown. Since 2005, the number of homes for sale on Haart has gone up pretty significantly. It could simply be that Haart's business is growing and advertising a larger share of the UK homes on the market, or it could mean that more people are selling. Arguably, the more significant figure is the percentage of price reductions as it indicates a discrepancy between what sellers expect to fetch for a home and what buyers expect to pay for one. After its highs in '05, this figure dropped back quickly, but over recent months, it has started to rise again. It's just short of 8% at the moment.... although anything that's not in double figures probably doesn't indicate the whole thing's going to come tumbling down. Watch this space....
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