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Largest Bank H S B C Warns Stay Awau From Property

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http://news.ft.com/cms/s/589049a8-9522-11d...00779e2340.html

Investors warned to avoid property

By Jim Pickard,Property Correspondent

Published: February 4 2006 02:00 | Last updated: February 4 2006 02:00

Investors should steer clear of buying UK properties for the next few years, the head of real estate at HSBC Private Bank has warned.
Willie Gething, managing director of property at the organisation, said the market - with the exception of London - looked like a bad bet, in terms of net yields and likely price increases.
HSBC Private Bank is one of the three biggest private client advisers, vying with the likes of Coutts and Citigroup to offer investment advice to the well-heeled. It has more than 4,500 clients in Britain.
The group has started advising clients against investment in property, both residential and commercial
, in most of the UK. Instead, said Mr Gething, they should be allocating their money to international indirect property funds, which offer higher returns and a wider spread of risk.
There were perfectly valid personal reasons for buying a UK property, such as emotional attachment or finding somewhere to live, said Charles Ellingworth, the group's marketing director.
"But for pure investors it is now very hard to justify at current yields," he said.
Net yields - the annual rental return on a building - are in some parts of the country as low as 3 per cent, lower than the cost of borrowing.
Thousands of investors are, nevertheless, still taking on big debts to build up large property portfolios. "People in Britain are still out there buying their flats on 98 per cent leverage, which is fine in the current interest rate environment, but if interest rates move up their investment becomes negative," said Mr Gething.
"These buy-to-let investors are still fighting last year's war."
The group predicted house prices, excluding London, would be no higher in five years time. However, prices in central London, were due for a recovery after treading water for the past few years.

Conclusion: Now is a bad time to buy. BTL is not the place to be. The HPC is coming.

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http://news.ft.com/cms/s/589049a8-9522-11d...00779e2340.html

Investors warned to avoid property

By Jim Pickard,Property Correspondent

Published: February 4 2006 02:00 | Last updated: February 4 2006 02:00

Investors should steer clear of buying UK properties for the next few years, the head of real estate at HSBC Private Bank has warned.
Willie Gething, managing director of property at the organisation, said the market - with the exception of London - looked like a bad bet, in terms of net yields and likely price increases.
HSBC Private Bank is one of the three biggest private client advisers, vying with the likes of Coutts and Citigroup to offer investment advice to the well-heeled. It has more than 4,500 clients in Britain.
The group has started advising clients against investment in property, both residential and commercial
, in most of the UK. Instead, said Mr Gething, they should be allocating their money to international indirect property funds, which offer higher returns and a wider spread of risk.
There were perfectly valid personal reasons for buying a UK property, such as emotional attachment or finding somewhere to live, said Charles Ellingworth, the group's marketing director.
"But for pure investors it is now very hard to justify at current yields," he said.
Net yields - the annual rental return on a building - are in some parts of the country as low as 3 per cent, lower than the cost of borrowing.
Thousands of investors are, nevertheless, still taking on big debts to build up large property portfolios. "People in Britain are still out there buying their flats on 98 per cent leverage, which is fine in the current interest rate environment, but if interest rates move up their investment becomes negative," said Mr Gething.
"These buy-to-let investors are still fighting last year's war."
The group predicted house prices, excluding London, would be no higher in five years time. However, prices in central London, were due for a recovery after treading water for the past few years.

Conclusion: Now is a bad time to buy. BTL is not the place to be. The HPC is coming.

The HPC is coming.

Except in London? (according to the above).....

"People in Britain are still out there buying their flats on 98 per cent leverage, which is fine in the current interest rate environment, but if interest rates move up their investment becomes negative,"

So you go long term fixed rate?

The group predicted house prices, excluding London, would be no higher in five years time. However, prices in central London, were due for a recovery after treading water for the past few years

Doesn't sound like a HPC to me...

There were perfectly valid personal reasons for buying a UK property, such as emotional attachment or finding somewhere to live, said Charles Ellingworth, the group's marketing director.

Your conclusions seem a little wayward IMO (based on the evidence in the extract above).

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yes and for saying that i believed London would not crash - as i have maintained since the day i joined these forums i was called a troll and told to "feck off"!!!! nice to see people on this forum actually confirming this! I live in central London (and i can only comment on central areas) and i can see what is going on! I don't despute what people are telling me is happening in for example Liverpool..............so perhaps we can actually contemplate that the whole of UK will not crash on the same day, at same rate across all stocks and property types?

Edited by beenhearingthisforyears

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Guest muttley

...........so perhaps we can actually contemplate that the whole of UK will not crash on the same day, at same rate across all stocks and property types?

I don't recall anyone ever saying that.Why would anyone think that?

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...and another thing, Realistbear.

Didn't you write to the BBC to complain of twisting and spinning information? (i.e. something about "1 in 5 FTBs willing to offer over the asking price on a property they really liked")

http://www.housepricecrash.co.uk/forum/ind...showtopic=23515

Your thread headline today includes "Stay away from Property"

This is quite a strong thing to say. Did they really imply "Stay Away from Property" in your extract above?

you also conclude:

"The HPC is coming"

Isn't this more spin? WHERE DOES THE ARTICLE SAY PRICES ARE GOING TO CRASH, MR LAWYER?

Face it, you are a hypocrite.

(I think I'll write to my MP to complain...)

:lol::lol::lol:

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Guest muttley

Because that was my point of view that just b/c Liverpool may drop does not mean London will. if you want me to find the posts i wrote last year to illustrate my point then i will take the time to do it..........

No,I see your point now.But this is exactly why I pay little attention to the Haliwide figures.A national 1.4% rise could still mean prices are falling in my area if prices have gone up 10% in,say,Northern Ireland.

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...and another thing, Realistbear.

Didn't you write to the BBC to complain of twisting and spinning information? (i.e. something about "1 in 5 FTBs willing to offer over the asking price on a property they really liked")

...

There's a clear difference between scrutiny of a broadcaster that declares it is unbiased publishing information and an individual on a forum who has declared to be a property bear stating opinion. Grow up and stop baiting.

T&T

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There's a clear difference between scrutiny of a broadcaster that declares it is unbiased publishing information and an individual on a forum who has declared to be a property bear stating opinion. Grow up and stop baiting.

T&T

Exactly. Troll bait if I ever saw it.

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...and another thing, Realistbear.

Didn't you write to the BBC to complain of twisting and spinning information? (i.e. something about "1 in 5 FTBs willing to offer over the asking price on a property they really liked")

http://www.housepricecrash.co.uk/forum/ind...showtopic=23515

Your thread headline today includes "Stay away from Property"

This is quite a strong thing to say. Did they really imply "Stay Away from Property" in your extract above?

you also conclude:

"The HPC is coming"

Isn't this more spin? WHERE DOES THE ARTICLE SAY PRICES ARE GOING TO CRASH, MR LAWYER?

Face it, you are a hypocrite.

(I think I'll write to my MP to complain...)

:lol::lol::lol:

Here is what the FT says in its headline:

Investors warned to avoid property
By Jim Pickard,Property Correspondent
Published: February 4 2006 02:00 | Last updated: February 4 2006 02:00
Investors should steer clear of buying UK properties for the next few years, the head of real estate at HSBC Private Bank has warned
.

When a newspaper with the standing the FT enjoys issues a warning, not a suggestion, to stay out you do not have to be a rocket scientist to figure out why. To me that says the HPC is on its way because a year ago everything was just fine. I have no doubt that you are deeply worried about such headlines and your response seems to suggest you may be getting scared?

So to answer your question "Did they really imply to stay away from property" my answer is no, they did not. It was not an implied warning to stay away, it was explicit: "steer clear."

As for a HPC, that is my opinion and on this forum there is freedom to express opinions. Who is being the hypocrite?

Face it, the market has gone from double digit inflation to a minus figure in a year and that is dramatic by any measure.

The HPC is coming, they always do. :lol::lol::lol:

Edited by Realistbear

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Good news for my central london BTL's..thanks bears :)

Some do not share the FT's optimism about London as the last crash did not leave the capital unscathed:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

London
More than 90 per cent of planning permissions in the pipeline are for flats, with Southwark, Hackney and especially Tower Hamlets due to swallow at least 52 per cent of them by 2016.
"Concern grows that new-build family housing is becoming a rarity in city centres," says Knight Frank, in its latest report, The New London. As investors shrivel, some developers are offering 10 to 20 per cent discounts on group purchases.
"The market for two-bedroom flats in secondary locations has been the hardest-hit, with
some areas being flooded by a mass of identical products."
While there is still a great need for flats in London, analysts worry about the wisdom of so many coming on to the market in the East End, especially in the Royal Docks, which has only the Docklands Light Railway for public transport.
Buy-to-lets may be having a hard time already - Knight Frank has 60 to let in Docklands, priced at £595 to £695 per week.
Last March, the largest site in the Thames Gateway area, 59 acres at Silvertown Quays, was launched to provide nearly 5,000 residential units, most of which are flats (and the biggest aquarium in Europe).
Royal Albert Basin is likely to pile in another 2,000 to 3,000.

There appears to be a glut in Docklands right now with just under 4,000 properties to let with Findaproperty.com:

http://www.findaproperty.com/regi0121.html

SE1 has 1,118 with W1 with 1106.

If these BTLs do not find tenants soon they may go on the market For Sale which could trigger some relaxation in asking prices.

Edited by Realistbear

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My BTLs are proper loft apartments not barret clones and a walk to the city :) I avoid new build.

Edited by mercsl

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There's a clear difference between scrutiny of a broadcaster that declares it is unbiased publishing information and an individual on a forum who has declared to be a property bear stating opinion. Grow up and stop baiting.

T&T

Exactly. Troll bait if I ever saw it.

But he's NOT stating opinion. He's saying (in the thread title)

Largest Bank Warns Stay Away From Property

Which is spreading misinformation (not opinion) if you actually read the article.

What's wrong with ME stating MY opinion on here BTW? Realistbear is a hypocrite.

I also think I did a pretty good job of tearing apart his bearish conclusions from the article.

(maybe that's what's really annoying you)

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But he's NOT stating opinion. He's saying (in the thread title)

Which is spreading misinformation (not opinion) if you actually read the article.

What's wrong with ME stating MY opinion on here BTW? Realistbear is a hypocrite.

I also think I did a pretty good job of tearing apart his bearish conclusions from the article.

(maybe that's what's really annoying you)

Stay away--Steer clear.....what is the difference?

Admit it, its the most bearish artcile we have seen for years and coming from the FT it carries a lot of weight. All those City bonuses will probably be making their way to the stockmarkets not London BTLs. The FT is the pulse of the City.

Edited by Realistbear

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But he's NOT stating opinion. He's saying (in the thread title)

Which is spreading misinformation (not opinion) if you actually read the article.

What's wrong with ME stating MY opinion on here BTW? Realistbear is a hypocrite.

I also think I did a pretty good job of tearing apart his bearish conclusions from the article.

(maybe that's what's really annoying you)

I've no problem with bulls on here. It'd be an awfully boring place without them. But you were baiting, which is childish and destructive of the overall well reasoned and well-intentioned debate found here (from both sides).

Also, you think a bit highly of yourself if you believe that you have done a good job of supporting your bullish position on the basis of this article. There have been a varied mix of bullish and bearish articles in the press on this subject and I think, on balance, that this one is quite obviously bearish.

T&T

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Also, you think a bit highly of yourself if you believe that you have done a good job of supporting your bullish position on the basis of this article. There have been a varied mix of bullish and bearish articles in the press on this subject and I think, on balance, that this one is quite obviously bearish.

T&T

I don't class myself as bull or bear. Sure I own property but that doesn't make me a bull. A fall in prices would suit me fine. I could move up the ladder easier.

I avoided STR for all the right reasons in my case. Renting is not for me.

I'm actually in a neutral position IMO so I am able to sit back and see both sides without bias.

A crash won't hurt me nor will stagnation. I'm also debt free and have been for several years (sorry to disappoint you RB)

Getting back to the article that this thread is based on, it DOESN'T give out the general message stay away from property. It actually says INVESTORS should stay away from property (not EVERYONE).

i.e. investors who wish to make a fast buck presumably. The article says there was nothing wrong with buying a house for personal reasons to live in. It also said prices are not expected to be higher than today in 5 years' time but it didn't say they would be lower (esp in London).

Yet RBs headline is "Largest bank HSBC Warns Stay Away from Property"

A touch misleading perhaps? Spin perhaps?

Edited by Without_a_Paddle

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I don't class myself as bull or bear. Sure I own property but that doesn't make me a bull. A fall in prices would suit me fine. I could move up the ladder easier.

I avoided STR for all the right reasons in my case. Renting is not for me.

I'm actually in a neutral position IMO so I am able to sit back and see both sides without bias.

A crash won't hurt me nor will stagnation. I'm also debt free and have been for several years (sorry to disappoint you RB)

Getting back to the article that this thread is based on, it DOESN'T give out the general message stay away from property. It actually says INVESTORS should stay away from property (not EVERYONE).

i.e. investors who wish to make a fast buck presumably. The article says there was nothing wrong with buying a house for personal reasons to live in. It also said prices are not expected to be lower than today in 5 years' time.

Yet RBs headline is "Largest bank HSBC Warns Stay Away from Property"

A touch misleading perhaps? Spin perhaps?

"
The group has started advising clients against investment in property, both residential and commercial, in most of the UK. Instead, said Mr Gething, they should be allocating their money to international indirect property funds, which offer higher returns and a wider spread of risk
.

The FT article, quoted in part above, simply advises against investing in UK property, both residential and commercial.

HPI has largely been caused by investors/speculators and VIs have been delighted to jump on the bandwagon and make commissions on hyping the market. The FT is warning these people to "steer clear" (or, as I put it, "stay away"). Why? Because market conditions have changed and the warning is for a 5 year period.

I cannot see anything misleading about the headline I used or how it differs from the words used by the FT.

It will be interesting to see if the BBC pick up on this article. Perhaps their spin will focus on the FT's comments on London recovering after "treading water for a few years" with something like: "HSBC recommends investors to get in on soaring London property values." :lol:

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"
The group has started advising clients against investment in property, both residential and commercial, in most of the UK. Instead, said Mr Gething, they should be allocating their money to international indirect property funds, which offer higher returns and a wider spread of risk
.

The FT article, quoted in part above, simply advises against investing in UK property, both residential and commercial.

HPI has largely been caused by investors/speculators and VIs have been delighted to jump on the bandwagon and make commissions on hyping the market. The FT is warning these people to "steer clear" (or, as I put it, "stay away"). Why? Because market conditions have changed and the warning is for a 5 year period.

I cannot see anything misleading about the headline I used or how it differs from the words used by the FT.

It will be interesting to see if the BBC pick up on this article. Perhaps their spin will focus on the FT's comments on London recovering after "treading water for a few years" with something like: "HSBC recommends investors to get in on soaring London property values." :lol:

Maybe you should have titled it "Private Bank Warns its well heeled Investor Clients to Stay away from Property outside London "

Not as punchy but maybe a little closer to the true message in the article...

'HSBC Private Bank' is a small exclusive and private part of HSBC with a small group of clients probably worth many millions each.

But I guess just saying 'Largest Bank HSBC' sounds more 'spinny' as it sounds like the whole of HSBC has warned its massive number of customers in the public to "STAY AWAY FROM PROPERTY"

Edited by Without_a_Paddle

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If you think that WaP then you're a fool :rolleyes:

OK, OK, maybe I should have said 'de-spin' the post rather than 'tear apart'! I was trying to defend being called a troll.

For me the article doesn't tell me anything 'bearish' I didn't already know. Prices are not going to rise much more and they may well fall in places. Not good news for investor clients looking to make a fast buck. Hence the advice to these people.

The interesting thing is that the article doesn't anticipate a problem with investing in London.

If anything, this article reinforces the stagnation argument rather than a crash.

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  • 302 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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