Gaining financial security is the main reason why most people turn to property, which is no surprise because property has been and continues to be one of the most solid investments around.
Investing in property represents the best reward vs. risk investment you can make for you and your family. It’s commonly known that pensions are giving poor returns, so whilst other investments are failing to deliver, property investment in the UK and overseas continues to grow.
Ups:
A slow down in construction has led to buying opportunities. From the Financial Times.
A couple transforms a building on the Greek island of Poros. From the New York Times.
The housing market will face two years of blight stemming from the impact of the global credit squeeze, with prices falling continuously over much of southern England, a report forecasts today.
Spain and Ireland are set for a prolonged slowdown in economic growth, according to Standard & Poor’s, as a drop in construction activity and consumer sentiment hits labour markets and weakens public finances.In a report published on Monday, the credit rating agency says house prices in the two countries – and the UK – are about 20 per cent overvalued and on the verge of a “protracted correction”.The impact of this on the broader economy would be more pronounced in Ireland and Spain, whose “economies are heavily exposed to the direct effects of the housing market slowdown on the construction sector”, says Standard & Poor’s. Construction accounted for 12.6 per cent of the total employment in Spain in 2006, compared with a European Union average of 8.2 per cent, it says.In Spain, unemployment in the construction sector has surged 53 per cent in the past 12 months, helping to fuel a 22 per cent increase in the number of immigrants out of work. Scores of small builders and property agents in coastal areas have gone out of business, and there are concerns about rising bad loan rates at some regional savings banks. House sales in the second quarter this year were 11 per cent lower than in the first three months, according to government figures.While acknowledging the downturn, the Spanish government has consistently played down its implications for the wider economy. Officials say their main worry at the moment is the impact of a broad slowdown in Europe on the country’s export and tourism sectors.More on Warning on building slowdown
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.
The introduction of a single 18 per cent CGT rate from April 6 could means savings in tax of thousands of pounds when these property owners come to sell and in some cases could cut their bills in half. But employee shareholders and long-term owners of farmland and other assets are alokely to be hit by the overhaul of tax on profits.
More on Buy to let market bouyed up by Capital Gains Tax Reforms
