MSE News: House price rise predicted by MoneySavers

sabretoothtigger

Scrudge wrote: »

comparing house prices to incomes or to rents. As these are in pounds and did not rise over the year to foreign investors these have also collapsed and therefore house do not appear to offer better value for money then before.

If the house price fell then the yield could have risen even if the rent stayed the same. Its a more attractive to buy into now then previously the case

House price then: 200k
Rent £10k per year or $20k
Yield 10%


House price now: 160k
Rent £10k per year or $16,391
Yield 10.24%



It seems to balance out between the two

HAMISH_MCTAVISH

Cleaver wrote: »

I understand your point, but (and I say this as someone who used to rent out a property) you always have a lot of your money in a very illiquid asset.

Let's say you have £60k of life savings that you could use as a deposit for a BTL. I'm fully in agreement with you that, over the long term, you'll get a good yield if you buy at the right price and are in it for the long term. But then it's there, very much stuck in one aseet. Which could be very profitable of course, but it is very illiquid. I guess the more attractive option now to me would be to take that £60k in a range of funds and investements that means you are heavily diversified and have liquid assets so that you can get at the money quickly if your life changes, or if economic circumstances change. Nothing stopping you putting a chunk of that money in propety funds of course.

So I'm agreeing with your point Hamish, but just offering my view as to why it wasn't for me and my Mrs. Which is what you said at the end of your post anyway. So, as normal, I'm not really sure what I'm saying here.

As I said, it's not for everyone.

There are other investments that are far safer, but offer much lower returns. And others still, that are more liquid and potentially more lucrative, but offer far greater risk.

For me, property has been proven to perform better than cash over the long term, and be less risky/volatile than stocks. It's a safe play for my investment horizon.

shakerbaby

Graham_Devon wrote: »

:rotfl::rotfl::rotfl::rotfl:

Finally, we have someone more deluded than Hamish.

Classic post though, moaning about someone being objectional, then right after, starting a paragraph with that!!!

The hypocrisy of the bulls is literally breathtaking.

Cleaver

HAMISH_MCTAVISH wrote: »

As I said, it's not for everyone.

There are other investments that are far safer, but offer much lower returns. And others still, that are more liquid and potentially more lucrative, but offer far greater risk.

For me, property has been proven to perform better than cash over the long term, and be less risky/volatile than stocks. It's a safe play for my investment horizon.

Agree with all of that Hamish. I just think that most people you talk to seem to think of it as a one-way, very safe and convenient investment. Which it clearly isn't.

sabretoothtigger

China Investment Corp bails out Canary Wharf owner Songbird Estates



A consortium of China Investment Corporation (CIC); Qatar Holding, the Qatari sovereign wealth fund; and a number of existing investors in Songbird Estates, the majority owner of Canary Wharf, have agreed a life-saving rescue rights issue to pay down £880 million owed by Songbird to Citigroup, the American bank. The deal saved Songbird from bankruptcy.
Subscription to a placing of new shares, which is fully underwitten and is expected to complete in the autumn, represents a gamble by the new investors that Britain’s commercial property market has hit the bottom.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6814331.ece

Scrudge

HAMISH_MCTAVISH wrote: »

For me, property has been proven to perform better than cash over the long term, and be less risky/volatile than stocks. It's a safe play for my investment horizon.

Well far too many times bulls used the phrase to the effect that the world is completely different now. I will use that as well.

In the longer term things don't look good for UK property due to the factors I mentioned previously. These are NEW factors that have not been with us untill recently/

1. pensioners of future years will be on pittance pension and many will rely on their house providing a pension - so will be forced to downsize much quicker - I know many pensioners currently living in 3-5 bedroom houses alone!!! Ti will be a huge downward pressure.

2. Higher taxes / and increasing student debt - will result in lower house price to gross earnings multiple.

3. Technology and Globalization - do not underestimate these. I work in banking and the technology is already there for me to work from any pace with decent internet access at least as productive as at work. So jobs will become more and more mobile and hence salaries will continue to move to equalization and so will house prices - which will mean a significant real term falls.

IveSeenTheLight

Scrudge wrote: »

Well far too many times bulls used the phrase to the effect that the world is completely different now. I will use that as well.

In the longer term things don't look good for UK property due to the factors I mentioned previously. These are NEW factors that have not been with us untill recently/

1. pensioners of future years will be on pittance pension and many will rely on their house providing a pension - so will be forced to downsize much quicker - I know many pensioners currently living in 3-5 bedroom houses alone!!! Ti will be a huge downward pressure.

2. Higher taxes / and increasing student debt - will result in lower house price to gross earnings multiple.

3. Technology and Globalization - do not underestimate these. I work in banking and the technology is already there for me to work from any pace with decent internet access at least as productive as at work. So jobs will become more and more mobile and hence salaries will continue to move to equalization and so will house prices - which will mean a significant real term falls.

On your points: -

1. One of the "NEW factors" is that people are increasingly choosing not to downsize from their lifelong home. I was initially against such options but increasingly people are releasing the equity in their homes and staying in their lifelong homes.
I thought it was a bit of a scam before but now consider it worth investigating to provide a future for the people who live in their homes and provide for their future.
Therefore, it is not cut and dried that they will be "forced to downsize"

2. There has been increasing taxes and student debts for well over the last decade. This did not affect house prices.
I would however agree that in the short term (until banks decided they want more profits again and loosen the strings again), a return to prudent lending would restrict the market.

3. While it is true people can work from remote office locations due to the advancement of technology, I don't believe this will equalise property across the UK. Simply put, some people prefer to stay in say London where there is much more options outside work than in a rural area such as the Lake district. I doubt that like for like, properties would equalise out in these areas.

Additionally, by equalisation, do you believe this would infer that the higher priced areas would drop to the UK average and the lower priced areas would increase?

IveSeenTheLight

shakerbaby wrote: »

The hypocrisy of the bulls is literally breathtaking.

Hypocracy is found in whatever sterotyped groups you which to label i.e. both bulls and bears.

It is not simply that one group are idiots and the others are geniuses

StevieJ

IveSeenTheLight wrote: »

3. While it is true people can work from remote office locations due to the advancement of technology, I don't believe this will equalise property across the UK. Simply put, some people prefer to stay in say London where there is much more options outside work than in a rural area such as the Lake district. I doubt that like for like, properties would equalise out in these areas.

Additionally, by equalisation, do you believe this would infer that the higher priced areas would drop to the UK average and the lower priced areas would increase?

Probably wrong but I got the impression he meant more work transfers to places like India :eek:

Really2

IveSeenTheLight wrote: »

Hypocracy is found in whatever sterotyped groups you which to label i.e. both bulls and bears.

It think the OP knows that. We have seen shakerbaby's history, so how he/she can moan about poster being hypocritical is beyond me.