Saturday, September 19, 2009

South East predicted to lead house price recovery

Focus: Residential Property - Ready to rekindle the affair?

The British have had a long-running love affair with property. Like many affairs, it has had its ups and downs, but the overall gains in residential property prices in real terms since the end of the second world war are hard to ignore. House prices cannot keep going up forever, of course. This fact seemed to be forgotten in the run-up to the latest slump. It was astounding to see so much investment into newly-launched property funds when it seemed clear that a major correction was due. The latest downturn in prices has been severe, having gone hand in hand with what has been the sharpest economic slump in the UK since records began. Confidence has been hit hard - but does that make it the ideal time to invest in one of the several residential property funds now coming to the market?

Posted by jack c @ 10:31 AM (1359 views)
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9 thoughts on “South East predicted to lead house price recovery

  • The experts suggested buy-to-let investors might play a key role in helping the property market recover,

    So basicly it is a buy to let market (investment). Families buying a home for themselves alone will not recover the market. I thought the market is at the top of the pyramid already.

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  • agreed…..that’s how ponzi schemes work….housing/stock markets bottom when no investor will touch with a bargepole,normally well below long term trend

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  • “The experts suggested buy-to-let investors might play a key role in helping the property market recover, as yields have soared to 10 per cent or even more.”

    – Oh yeah?

    Show me evidence of soaring rents – show me evidence of headline annual rents that are more than 10% of a poperty’s value..

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  • someone with total cash may get a nice yield but 96% of btl investors require a mortgage…they also conveniently seem to ignore maintenance and gaps in rents,and of course interest only is now normal

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  • He is talking about yields not rents – Interest rates go down so yield goes up.

    However, looing at the find-a-property rental index the average yield is about 4.56 and falling evein in the best performing areas

    Kensington & Chelsea 3.93%
    City of Westminster 3.69%
    Camden 4.52%
    Hammersmith & Fulham 4.34%
    Richmond upon Thames 4.44%

    http://www.findaproperty.com/media/rental-index/FindaProperty_Rental_Index_Jul_09.pdf

    THe article must have been written by someone with a vested interest in property fund. With 2.47 million unemployed and rising yield will face ever more dowward pressures..

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  • “Jeremy Leach is managing director of Managing Partners” …
    Surely not another VI, See managing-partners :
    “This is a new Fund so there is no yield drag on historic investments. It offers high capital growth potential as the UK property market recovers. The strategy is to buy properties significantly below current market value, to negotiate aggressively (facilitated by our low levels of bank borrowing and our ability to buy for cash) but to buy cautiously. This means that we ensure there is a healthy buffer against further potential decreases in values”

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  • Bottom of the barrel for the FT. Wheel on a clear vested interest to do an advertorial.

    Obviously their pay-by-online-subscription system is not working that well.

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  • Eternal Sceptic says:

    The more money suckered in, the higher the dead cat bounces!

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  • 10% rental yield. Does that mean a £100,000 property rents for £833/month? I suspect the so called experts are full of it.

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