Quote:
Originally Posted by Coatsy
The golden question is, how bad will it get?
The UK market is certainly starting to see the effects, I've been following the UK property market very closely because I'm about to buy a place.
In Northern Ireland property prices are down 8% from Jan 07 - June 07
The Bank of England have announced that loans will now be harder to get. Much higher interest rates.
Yesterday the IMF warns that UK house prices are at risk of falling.
The UK buy to let market is in trouble, rising costs (interest rates specifically) are lowering profits and in a lot of cases rent is no longer paying the mortages.
Most first time buyers in the UK completely priced off the market, average property prices costing anywhere from 5 - 10 times their yearly income.
Reposessions are up around 30% from last year, this will only get a lot worse once the next batch of fixed rate mortages end in 07 and these people see massive hikes in their interest rates.
Some analyists are predicting house prices may drop by 15% in 2008.
This all paints a rather gloom picture in my opinion. It also makes me wonder if I should wait and see what happens in the next few months before buying a place  |
Definitely a waiting time before investing Coatsy
Noticed banks etc are up to the same old scams with their mortgage lending and have been offering up to five times income (used to be 2 or 3?) and throwing out loans to the sub-prime market, much the same as happened in the US.
Yea... can see the Bank of England tightening up - they have little option but to slam a lid on this market. That is one area where the background is totally different to the US scenario - they actually have an effective fiscal policy and this was managed by Brown as the tight-assed Exchequer Chancellor, so basically the economy is fairly good. But.. any home market hits can affect that, sometimes seriously.
Who knows how bad it can get?? Sure.. can see a 15% drop being possible next year - and possibly further drops the following year. It's fairly easy to have an overall drop of 30% over a few years when a downturn happens. Suspect the US home market will drop further within that range (tho partly because there are a number of other background problems).
Seriously - I'd sit on your capital and have it earning securely and look forward to a better buying price when it does hit the actual bottom. A 20-30% drop on a property sure is a lump less to pay or commit to
PS Kinda related - got some possible biz with a US builder for a number of homes (homes are not going to be in the US - would not dream of doing that right now with two sets of rubber gloves on) and one of our people is in the US now. We reached a stopping point in contracts because it just hit us that the construction company may not exist in the time they have given guarantees. That would leave us with all their potential problems - so, volatile time right now!!