The Times, which has apparently become a government press release farm, is all excited about a new mortgage product by government-owned Lloyds TSB. “First-time buyer deal breaks mortgage deadlock,” says the Times, and the lead in is “Lloyds TSB earns praise for new 95 per cent LTV.“
London townhouse sold for huge discount; the UK, Hong Kong, Dubai and Calgary markets have bottomed out; Luxury resort in the Bahamas goes broke; Irish property prices have fallen 52 percent and a British Member of Parliament forgets he paid his mortgage off.
Volatility still rules the property markets – although when the term “volatility,” started to mean “dropping prices,” remains a mystery. A few interesting reports from the property investing world make disturbing reading for some markets – particularly some of the emerging markets.
I do not think it will come as a surprise to anyone that British home prices are continuing on their downward trend. According to the Department of Communities and Local Government (DCLG), house prices fell in December to February this year by 12.3 percent compared to last year, and the average house price is now around £189,000.
The over valued, over leveraged buy-to-let property market in the UK is now coming to terms with a new reality. The lenders had written clauses into many buy-to-let mortgages which insist on a certain level of equity being held in a property, and most buy to let mortgages taken out in the last few years are now falling below that ratio. Terms vary, but several banks have already exercised their right to insist on a capital injection from the borrower, as property prices in Britain continue to decline.
As a small property investor, I always keep an eye on what is going on in the news, particularly what is being reported as “news” by the so-called professional news suppliers. It is becoming increasingly obvious that the newspapers are attempting to “talk the market up,” in an effort to re-inflate the property bubble that allowed their advertisers to keep paying their bills. But – reading between the lines and comparing the actual news stories with the spin tells a very different story.
Those of us who watch these things have noticed a disturbing trend over the last month or two – The national and international newspapers talking up the housing market quite aggressively. Much to the ire of their readers who are rightfully questioning the information being given. These are a few examples.
More on Property Investment Advice – Beware the Newspapers Talking up the Market
Numis Securities, a City investment bank, expects amateur buy-to-let landlords to begin “panic selling,” their investment properties as house values continue to decline in the UK, causing the average home value to fall below £100,000. Their recent report stated:
More on British Property Prices could fall another 55 percent
I have just finished reading through the great Barack Obama’s fix for the foreclosure mess in the USA which will magically mend the world’s housing woes. NOT!
For those of you expecting a quick fix to the financial crisis, sorry to disappoint, but this is just another $275 billion of US taxpayer’s money pissed down the toilet. Ignoring the fact that the whole mess started by lending cheap money to people who could not afford to make the payments and doing more of the same is just…………. Not even sure I know what word to use actually. If any individual acted the way the governments and banks are doing, I guarantee they would be behind bars this very minute.
Things do seem to be hotting up in the investment property world, and I don’t mean burning down hot as seen in the recent Australian bushfires. Volatile is the word that comes to mind. As developers and agents try to combat falling prices, we are starting to see some interesting approaches. Most of Manhattan seems to be up for rent at the moment with luxury condominiums in Manhattan completely failing to sell.
Norwich Union, who recently changed their name to “Aviva,” have put a freeze on investor withdrawals from their “Norwich Union Unit-Linked property fund.” The excuse they have given is that they do not have any money and want to liquidate some of their assets by selling some of the property into what has to be the worst commercial property market in the last twenty years. Good luck getting your money back if you “invested.” any money in this one.
More on British Property Prices continue to decline and Aviva Freezes withdrawals from Fund
