Property Market – Drepression on the way August 7, 2007
Posted by ukmortgagez in Economics, Mortgage Economics, Mortgage News, Property.1 comment so far
Its been a bit of time since we last updated this blog so I thought I would catch up on the news.
The US property market is in decline with a number of mortgage lenders in trouble.
It looks as if the UK property market is going to flatten out. You can check this site out for UK housing stats in your area.
UK interest rates are going up too.
So the obvious conclusion is that at sometime in the next year or so property prices will be hit.
The US Dollar will devalue further under the weight of the US debt.
Here are our predictions:
- Interest rates in the UK to go to 7% (thats only 1.25% more) in the next 2 years.
- The Pound will strengthen against the dollar but remain steady against other major currencies.
- There will be global recession possibly leading to a global economic depression in the next 2-3 years. This could be as bad as the “Great Depression” 1929.
- The housing market (globally) will be crushed and should devalue by more than half of the current pricing (conservative estimate). This will be mainly due to a run on property by the banks looking to secure their debt.
So who will be left standing and who will benefit:
- People will real value will remain in business but marginal businesses will close down. Debt will not be cheap.
- People with real money (not debt) will be able to pick up great deals and will benefit in the long term.
- People with cash will receive high rates of interest (I have personally seen 24% interest rates in my life time) and property was cheap.
- This will lead to government reforms and a stream lining of the economies across the world.
- Oh and my last big prediction will be that the US Government will default on its government bonds leading to and end of the US dominance and a pull back in military spending, which will ultimately change the global power shift across the world.
So hold on kids this is going to be quite a ride.
World Property Prices October 22, 2006
Posted by ukmortgagez in Mortgage Economics, Mortgage News.add a comment
Just to follow on the last prices about the Property market. There seems to be a world wide trend in property prices. All the developed economies are following an upward pattern. For the first time this year 2006 the US property market is predicted to fall and this might be enough of a knock on affect to bring down the UK and Australian property markets.
That having been said you can not predict what an irrational mass herd mentality will do. Government intervention may be enough to hold the property market steady for a while still but these actions remain to be seen. It is interesting to note how much data is coming out about this predicted slump in the property market and it will be interesting to see how exactly this market plays out.
UK Property Prices October 22, 2006
Posted by ukmortgagez in Mortgage Economics, Mortgage News.add a comment
This is a graph of the UK Property Prices. Whaty I find interesting is that many people do not believe that property prices can go down. I hear arguments about how it won’t happen and the market will just flatten out at a worst case scenario. Prices have gone down in the past and they will go down in the future.
Property is not an immune asset class to falling prices. What is obvious is that many people have not seen a property fall in about a generation. They believe because property is an immovable asset it will hold it’s value and go up. They have been right for the last 10 years but 20 years ago people from a previous generation felt the affects of a price fall on the property market.
Let buyer beware that property is not a stable asset class over the long run.
I do not like to make predictions about the future but what I can say with some certainity is that property prices will come down in the future and your investment is never as secure as you believe. One of my favourite investors in the modern area always goes back to the same speach which goes something like this, “Investing is based around fundamentals the core of which is return on investment and free cash flows.” Property has free cash flows in the form of rental and one must consider the rental incomes in working out the ROI and value of the asset class.
Next time I’ll try to write about rental incomes in the UK.
James UK Mortgage Articles October 8, 2006
Posted by ukmortgagez in Mortgage Economics, Mortgage Insurance, Mortgage News.add a comment
I would like to say that we have a new author on UKMortgagez. James has started writing for us and we have created a section for him on the UKMortgagez site so that you can have a look at his different ideas and helpful hints on the Mortgage business.
His section is under mortgage articles.
Let us know what you think of his ideas.
Calculating Mortgage APR October 3, 2006
Posted by ukmortgagez in Mortgage Economics.add a comment
One of the most common concerns is how average percentage rate (APR) is calculated. At UKMortgagez there is a very good detailed explaination on the subject that I would like to direct you too.
The crux of the matter is that is the APR calculations are not are all equal. UK and European APR calculations are different to those found in the USA. It is important to therefore bare this in mind when you look at APR figures given by different companies.
The UKMortgagez article goes into great detail around this issue and I would like to suggest that you consult the article in more depth if you happen to be interested in APR calculations.
