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Many people with spare cash have chosen to put it into property. It’s been a wise move, and buying-to-rent has been a nice little earner for landlords.
But signs are that over-supply is calming the market. In simple terms, the number of people renting their properties has risen faster than the number of tenants.
Savvy renters are getting a better deal. But buyers looking for new property can take advantage of these market conditions.
Many new developments in places like London are due to be finished this year or the next. The developers want to sell their new units as soon as they can. And news is that they will negotiate.
You really rather have to admire the bravado on display here:
Northern Rock stands accused of “reckless” lending after it emerged this weekend that the beleaguered bank is still offering mortgages of six times salary to potential borrowers.Despite provoking the worst banking crisis for decades, the bank last week offered a reporter posing as a first-time buyer a £180,000 mortgage even though he had a salary of only £30,000.
The loan was at least £30,000 more than other leading lenders were prepared to offer. Repayments for the loan would have accounted for more than 60% of the fictional buyer’s take-home salary.
The reporter, posing as another potential customer, was also offered a so-called “negative equity mortgage” worth 117% of the value of the property he claimed to be interested in buying. The mortgages offered by other banks to the same potential borrower were significantly lower.
Don't forget that this sort of lending is now being supported by the taxpayer's money: even if it is at a high interest rate.
As the Wall St Journal blog points out, Alan Greenspan has identified the true culprits in the current credit crunch.
...former Federal Reserve Chairman Alan Greenspan sharply criticized ratings agencies for their role in the current credit crisis. “People believed they knew what they were doing,” Mr. Greenspan says in today’s German newspaper. “And they don’t.”Still, he doesn’t think it’s necessary to strengthen rating-agency regulation. Essentially, they’re “already regulated,” he says, because investors’ loss of trust means the agencies are likely to lose business. “There’s no point regulating this. The horse is out of the barn, as we like to say.” Greenspan also said he believes that the volume of structured-finance products will decrease. “What kept them in place is a belief on the part of those who invested in that, that they were properly priced. Now everyone knows that they weren’t. And they know that they can’t really be properly priced,” said Greenspan.
As The Clash once asked, "Should I stay or should I go?” It’s a question more and more householders are asking as they ponder how much higher the value of their properties can rise.
Last year saw some spectacular gains in the property market. Property prices began going up around the start of 1996, but last year they soared by between 20 and 30 per cent.
Taking a look at history, the statistics suggest that there is more to come. With interest rates lower than a worm’s limbo contest, and equity faring indiffferently, property is a great place to have your cash.
Looking back at 1958, property prices rose then for almost 15 straight years, at an average rate of around 6 percent per year. In the 1990s, the boom before the bust saw prices rise by an average of 8.7 percent for seven years.
You have to hand it to Rupert and Mandy.
Getting into the property market when the boom was just about to start was a masterstroke.
Rupert and Mandy are so successful at the property game that their dinner parties have turned into property masterclasses. The only problem is to decide in which of their many splendid homes they should hold court in.
Unhappily, you missed out. Unluckily for you, you had no spare cash in the mid 1990s to buy up undervalued property stock and cheap land.
But now you have some money, you can get a foot on the ladder.
As reported: "In Russia suspended ceiling is not only a stylish element of the flat interior, it can simply save your dwelling from flood made by the careless neighbors living above. Like in this case the practice shows that it is able to gather and hold all the water. Now the question is how to pour it off safely. But just imagine you wake up one morning and your ceilings look like this!"
If you look up your new street on the web and find it dubbed "the Murder Mile" or "the frontline", be warned. What you gain in ammo and access to recreational drugs you lose in property prices, TV and car stereos.
You are making the biggest investment of your life. No, not the drugs - the house. You do not want to buy in the wrong area.
In America, a company has designed a service that plots crime on a map. Handy. Says Oakland Crimespotting:
The Croydonian has spotted this in Business Week, via Der Spiegel:
"Could any country be more exposed to the current credit crunch than the U.S.? You bet, and that place is Britain...."Britain is likely to suffer more severely than the U.S." if the current market turmoil continues, says Danny Gabay, director of Fathom Financial Consulting in London....As in the U.S., consumers are another key driver of the economy-and today they're among the most indebted in the world. British consumers owe $2.7 trillion on credit cards, mortgages, and other consumer loans-or more than the country's entire economic output. Household debt as a percentage of gross disposable income is 166%, compared with 127% in the U.S. So it's hardly surprising that in the past year, British banks have had to write off $18 billion in bad debts, mostly consumer borrowing.Such write-offs could be just the beginning if housing prices start to fall."
What am I bid for the Dismal One [Gordon Brown] bottling calling an election and then waking up to discover, "For they have sown the wind, and they shall reap the whirlwind: it hath no stalk: the bud shall yield no meal: if so be it yield, the strangers shall swallow it up".
Via [The Croydonian; Anorak; Business Week]
Forget Through The Keyhole. There are now less painful ways to look around someone else's home:
Here's the story of (as far as I know) the first open-house to take place in Second Life. US agents Coldwell Banker took an experimental approach to marketing a $3m property on Mercer Island (Washington State)... building a Second Life replica.According to the brokers, the virtual house had 3,500 visitors in three days (and the numbers have continued at around that level), compared to the 50 to 100 people they'd expect to visit the real property each day. And no - they didn't just come and make out on the sofas.
Via [Rat & Mouse]
Do you live in a decent home? I keep a clean house. But is it decent?
A look to the Government’s communities’ website revels that “a decent homes are a key element of any thriving, sustainable community”.
We hear you. But what is a decent home?
Reading on: “In order to be decent a home should be warm, weatherproof and have reasonably modern facilities.”
“HOUSE prices and the great affordability gap.”
The Times has a picture of a row of homes (known as investments) and a graph. The line shows the “proportion of salary going on mortgage”. The line is rising.
The Times has seen a survey by the Royal Institute of Chartered Surveyors that says mortgage repayments are taking up the largest proportion of take-home pay for 17 years.
This, readers are told, is the “bleak assessment”.
