Are you interested in UK property going into 2009?
These pages are both for the layman and the expert professional.
If you are easily offended by truth, then don’t read any further!
We will make your life easier!
Property Trading London has extensive experience in property development. We have improved on industry practices backed by business and scientific knowledge coming from our mastermind group.
And now it is time to share this experience with you!
Here you’ll find the latest up-to-date improved free resources where possible, and some selected others.
Find what you’re looking for:
House Price Trends 2009
Buying Property
Property Search
Selling Property
Estate Agents
Property Development
Renting In London
Property Courses
Property Tax in the UK
What is happening in the UK real estate market moving into 2009?
There are three different house prices:
• The Asking Price, which is the price on the sales brochure, determined by a consensus between the vendor and the estate agent…over lunch!
• Sold House Prices, determined by a consensus between the vendor, the buyer and negotiation by the estate agent
• The Actual Price, which is the actual value of the property. This is a combination of the above, and time bound, decided by the current market. It’s a bit of a black art, for which you have to attend property surveying school, just to go ask local estate agents how much a property is worth, for only they are close enough to the market to know
You can imagine how hard the task of valuation is made these days with nobody having a precise idea of what people are willing to pay…but let’s stay focused.
Current house prices will more than likely keep going down in 2009 and 2010. Interest rates will go up and down at times, as they do…and Loan to Value LTV will keep decreasing to a round figure of 75%. Since the government injected huge amounts of cash into the bust banking industry, they will be greatly involved in Buy-to-Let mortgages, with huge implications for all. Financial products to buy property will be ideal at times, and hard to get on other occasions.
The strategy of the property developer has to become more flexible and smarter, in order to take advantage of good deals. Ability to mobilize private finance will be paramount, as well as finding a good mix of Buy-To-Let and Buy-to-Sell investments. Property Trading London has adapted accordingly and also adds value to property deals, buying them at discount prices and through their trademark smart refurbishments.
What you really need to know is that the current market is a buyers’ market.
Crises are cyclical, and offer an opportunity for transfer of wealth. Historically, rich and wise people buy assets in times like this. Most top 10 millionaires, such as Donald Trump, made their fortune in times like this.
‘In times like this, it is always good to remember that there have always been times like this’
The opportunity lies in the fact that there will be a widening gap between the asking price and the sold house price of a property. There is room for negotiating prices down, like never before. As some reach their financial red line and are forced to sell. Whilst this is true for the middle and lower segments, the upper markets have remained untouched. The richest are less vulnerable to interest rate changes since they’ll be cash buyers or have special resources.
London has historically outperformed the rest of the country.
You don’t need a math’s degree to understand that when the average house price goes down there are still locations and certain properties that perform above that average. Prices have and are going down indeed, but not indefinitely…so be prepared to catch the big fish!
The same was true during the property price boom. Whilst the average property price kept going up and up we were still able to find cheap property that nobody thought possible.
Market trends are a function of many interlinked factors. For a full appreciation of property price trends I recommend the in-depth study by Robert J chiller on House Prices Trends.
At present the majority of people are unable to finance the purchase of a property. This causes an optical illusion that there are a lot of cheap house for grabs out there. But there are more people than there are houses in London, and in the whole UK for that matter. And this hard fact will eventually drive house prices up again, baring a major terrorist outburst or nuclear warfare or its long term financial equivalent, known as recession.
Soon the financial markets will recover and property scarcity will become apparent again. All it takes is for banks to resume lending, which is very likely since that’s how they make money.
In the meanwhile, the very construction industry adapted by creating new incentives for first-time-buyers. This is explained in the section Buying Property.
If we go back to a vendor’s market, estate agents will become arrogant again, and you’ll have to be a polite pain in the backside if you wish to find good deals. The property crash in the 90s was followed by a slow but steady increase in house price.
Just remember that the basic law of demand and offer is always valid!
When Will we See Recovery?
Nobody knows exactly, but a few have a go at guessing. The fact of the matter is that the market is a massive crowd, not a rational whole. If the press decides that it is a good idea to publish that a recovery is likely in 2010, then it is very likely that the crowd will follow. Want to bet?
Economists will come along and explain everything after it has happened, with fancy models and theories, when in reality it’s about mass psychology and randomness. If you really want to know what is going on, we recommend: The Tipping Point: How Little Things Can Make a Big Difference, by Malcolm Gladwell; and Fooled by Randomness, by Nassim Nicholas Taleb.
Surveyors who value properties also read the public press and watch television and therefore will influence their valuations on whatever is the general feeling of the market. Since a home can be your greatest asset or liability, responsible buyers ought to do their own market research. This is done simply by obtaining expert local professional advice from at least three well established estate agents, who should inspect the property for that valuation and by checking prices for sold properties in the very same road.
