Sunday, January 20, 2008

Great expectations!

Property addicts are facing a painful spell of cold turkey

George Bernard Shaw said property is to the middle classes what gambling is to the poor. Either can lead to addiction. One sign that any house price downturn will get uglier than we hoped is when property funds start to get into trouble. When the market turns, it is impossible to get your money out. The huge unknown is how buy-to-let landlords will behave as prices tumble. During previous recessions, second-property owners dumped at the first sign of trouble.

Posted by confused76 @ 10:28 AM (752 views)
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3 thoughts on “Great expectations!

  • “….Unfortunately, there remains a significant rump of speculative landlords with portfolios running into millions of pounds. Many are lucky to have equity of 20%. If prices fall by 20% they are wiped out.

    If they ditch, we are all lost……”

    Mmmmmmmm……..

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  • On the Isle of Wight during the last crash property prices fell by up to 70% soley because of second holiday home owners selling off property. It will be a bloodbath this time. Almost 9000 properties are lsted on Rightmove alone at the moment for the Isle of Wight. Average wage here is £18000. Resident population 130000. Who on earth is going to buy?

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  • This is bearish stuff from the Scotsman. Usually its filled with dirty property porn of the highest order.

    I do think that Edinburghites truly think they are immune to what is going on south of the border (including London), Northern Ireland. Rep of Ireland, Spain and ther US. They keep spouting on that they are the 5th largest Financial hub in Europe and that bankers will prop the market here. My in laws do not share my bearish views on the property market (which I have had since 2002/3).

    Now that sentiment has turned south of the border, they have changed their tune slightly, siting prices lulling for the next 3 quarters before picking up in the 4th quarter of 08 in Edinburgh. Before it was they only ever go up, quick go out and buy now!!!, this nonsense was soon quelled once I suggested putting their money where their mouths were. Apparently Interest rates are coming down big time in 08, so the party will begin again. No mention of inflation issues though. They do own a blo0dy big house in which i feel their retirement is highly reliant.

    In all fairness property in Scotland as a whole seem to be immune so far to the negative press, so far. Here’s hoping.

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