An unexpectedly sharp correction in house prices resulting from the global credit squeeze poses a significant risk to growth in Europe, according to the European Commission.The European Union’s executive arm forecast a gradual slowdown in growth from 2007 to 2008 but said continuing financial market turmoil meant the risks were “clearly tilted to the downside”.Among the threats it identifies is a worsening of the financial turmoil that could hit housing markets in Europe as well as the US “thereby deepening and prolonging the ongoing corrections”.So far, those European countries that saw the fastest growth in house prices, such as the UK, Spain, Ireland and France, have generally seen an orderly slowdown this year. But the Commission’s latest EU economic forecast hinted at policymakers’ fears of a sharper adjustment. A special section on past house price cycles warned that while other regions were sometimes more volatile, “the historical experience suggests that major housing downturns have also had a substantial macroeconomic impact”.More on House price correction threatens EU growth
Buying a house in order to sell for a profit has become quite popular thanks to the plethora of property shows on British TV. Is it really as easy as they make it seem?
Steven Toumbas, an equities investor from London, has always wanted to own a second home in the US. “America is the engine for the world,” he says. “Everyone wants to have a holiday home in Florida, or an asset in New York. It’s the place to be.”
The first-time buyer crisis has been one of the major issues of the housing industry and recent events have ensured it is not about to go away. Nor, as a result, will the scapegoating.
The radical simplification of capital gains tax (CGT) announced in this week’s pre-Budget report means owners of buy-to-let properties and second homes are set to be big winners.
More on Buy to let market bouyed up by Capital Gains Tax Reforms
