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munimula

Homes Under The Hammer

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The winning bidder of Liverpool house at auction was an Irish guy that buys houses on behalf of Irish investors. He stated that the reason for this was that Irish house prices have risen so much that Irish investors have been forced to look to the UK for better investments. The house went for double the guide price which seemed crazy but then if you were Irish and were comparing the prices to those in Ireland you would probably still think that you had a bargain.

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The media in Ireland is crammed with ads for overseas property. Some over recent months have focussed on investing in the UK - Manchester apartments was one that springs to mind. "No more mugs in Manchester then" I thought.

You are absolutely right when you say that it appears cheap to the Irish investor. It is as if we are trading in a commodity now with no bearing on the location.

"200k Euro, wow that's cheap, it's 400k in Dublin" is the thought process. Many ads for property in Bulgaria, Turkey and Spain etc play on this fact, as if you are comparing like with like - which of course you are not.

Remember that the investor in Ireland is prepared to put down a deposit of one-third the value of the property in order to achieve a monthly cash flow breakeven (rent just covering monthly mortgage payments). Compared to that, UK apartments look very cheap. The investor will also borrow in Euro, on much lower rates and pay just 20% capital gains tax.

For centuries the Irish were second-class to their English land owning masters. The opportunity to boast about how they now own English property and rent it back to them is just too compelling for many.

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The media in Ireland is crammed with ads for overseas property. Some over recent months have focussed on investing in the UK - Manchester apartments was one that springs to mind. "No more mugs in Manchester then" I thought.

You are absolutely right when you say that it appears cheap to the Irish investor. It is as if we are trading in a commodity now with no bearing on the location.

"200k Euro, wow that's cheap, it's 400k in Dublin" is the thought process. Many ads for property in Bulgaria, Turkey and Spain etc play on this fact, as if you are comparing like with like - which of course you are not.

Remember that the investor in Ireland is prepared to put down a deposit of one-third the value of the property in order to achieve a monthly cash flow breakeven (rent just covering monthly mortgage payments). Compared to that, UK apartments look very cheap. The investor will also borrow in Euro, on much lower rates and pay just 20% capital gains tax.

For centuries the Irish were second-class to their English land owning masters. The opportunity to boast about how they now own English property and rent it back to them is just too compelling for many.

Funnily enough, my last flat (In manchester centre) was a brand new btl owned. The owner lived in dublin. He paid 115,000 for the flat (1 bed), maybe extra for the furnishings. Quite small but high quality, advertised as 600p/m. I got it down to 550p/m. I assume the estate agent/managing agent take some of that fee (big agency, rip off ****s). So lets imagine he gets 500 p/m. Im guessing thats a yield of around 5.2% (maybe sums wrong). Factor in inflation, cost of finance, and the oppurtunity cost of alternative assets, void periods (as it currently is) and it does'nt seem too good. Obviously in it for the long term.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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