Property Investment, data and predictions galore!!

Maybe June turns on the rent a property prediction/property data tap but the last few days have just been very very strange.

On one hand some very unnerving data came out from the US stating that prices in some areas such as Atlanta and Vegas are now down to their 2002 prices. Add in some consumer price inflation during that time then realistically you got some pretty serious property price issues.
http://www.guardian.co.uk/business/2011/may/31/us-economy-consumers-house-prices-fall

Not to be outdone- any press topic relating to the US economy but then get in a comparison with the great US deppression of the the 1920's
http://www.independent.co.uk/news/business/news/us-house-price-fall-beats-great-depression-slide-2291491.html

Then you have the front page of the express stating that house prices willl increase by "15-20% by 2015 - highly unlikely- but if it happens ill buy you all a glass of champers!

Then its back to the gloom with
http://ftalphaville.ft.com/blog/2011/06/01/581341/uk-house-price-gloom/

Then its back to how rich we property owners are if the properties are in the south!
http://www.guardian.co.uk/money/2011/may/31/home-ownership-expensive-london


The truth is that no one truly knows what is going to happen to the housing market. All we can do is look at the fundamentals and whenever you breaks that down, its really demand and supply.

If you look at the states, there is so much land available, that somebody has the alternative to go and build themselves a home ( as well as the financial products) if they dont like what they are being charged by the builder. The ease with which people can build out there is illustrated by greedy builders who kept on building in places like vegas and florida without asking themselves who was going to buy them.

That option isnt available in the uk to the same extent due to very old planning laws. Most of the time (and we'll discuss planning later) planning rules are a pain, but they serve home owners very well in times of distress as they prevent excess building to the same degree as we see in the states.

Secondly if people could get the finance, their are literally thousands of people that want to buy their own home but can't. Hence they have to rent which is increasing rental prices and hence yields. If prices fall which they have, buyer then move into the market (e.g BTL investors who can get finance) and prices rise reaching equilibrium.

I can assure everyone that although I'm very pro property- we always look at the downside for all our clients and investors before we make any comments or recommendations.

I always say the £million question you should ask any so called property seller is, would you buy it yourself.

And if I could afford to buy a million pound house in the south, particularly in Reigate, London or other parts of Surrey (safely without over-stretching myself) I would!

till the next time.