International property investment advice from our expert Alan Forsyth
Latest Property Investment Advice
Brought to you weekly by our international property expert, Alan Forsyth.
Posted on 27 March 2007
The US and UK Property Markets
Hi everyone,
Hope you are well – and investing wisely.
I have had a busy 2 weeks in London, meeting investors and developers, and in Nottingham finalising several deals.
Good to see British summer time here as well and the brighter evenings - I may even venture onto the golf course soon.....
This weekend I am in the North East of England and then Scotland - watching my local football team - before checking on property opportunities in Scotland. As always any questions, email us at info@property-investment-tips.com
Best regards
Alan
Table of Contents
1. US Property Market
2. UK Interest Rates
3. Upcoming Opportunities
US Property Market
The big story with the US housing market has been around the sub prime mortgage market, or more accurately the collapse of this market over the last months.
Lenders have over the last few years lent billions of dollars to people with poor credit, believing they would be protected in the event of default by rising house prices, and offered no money down loans, with the equivalent of self certified loans.
As the market has wobbled and in areas dropped by up to 15% - this has brought about considerable pain for many lenders and home owners that have taken on far more than they should have.
Around 30 mortgage lenders have closed down in the last few months – with up to 100 more to follow.
This suggests there will be a large number of properties coming onto the market as repossessions rise and new inventory comes onto the market.
Overall however the market is solid – with a third of all properties being owned mortgage free – and over 50% being owned on traditional, fixed rate mortgages.
So overall worth keeping a close eye on, but I would expect the market has a bit further to drop, so keep your money ready and waiting!
UK Property Market
The minutes from the Bank of England’s latest monetary policy committee came out last week and made encouraging reading with members voting 8-1 to keep rates at 5.25%, with the one vote voting for a cut.
This suggests it is unlikely that rates will now go up next month as initially expected, but with inflation rates still higher than hoped for, there is still the chance rates will need to rise in May.
As always we would recommend targeting areas of the country where local affordability is high – and property will still be affordable locally if prices rise by 20-30% - after all if it is not, you are unlikely to see much capital growth.
Although the national average house price/income ratio is around 9, there are still areas of the country where this is as low as 4 – it clearly makes sense therefore to target these areas of the UK, as you will see continued stronger capital growth over the next 5 years. These areas are still seeing double digit capital growth per annum – giving fantastic returns on investment for investors and owner occupiers alike.
New Overseas Deal Opportunity
Our last overseas deal sold out quickly, but we expect to have our next deal ready for next week. This has the key attractions we always look for, namely:
High Leverage
Positive Cashflow
Excellent local affordability – ensuring exit strategy and capital growth
To ensure you see the details as soon as they come out, ensure you are signed up at www.property-investment-deals.com
or drop us an email to info@property-investment-deals.com.
That’s all for this week,
All the best
Alan
PS – We are the largest sourcers of UK high yielding buy to lets in the country and have a team in place in all UK hotspots – for more information, email us at
info@property-investment-deals.com
or call us on 0115 947 4155.
Return to Alan's home page
About Alan:
Alan Forsyth is a full time property investor from the UK. He runs the website www.property-investment-tips.com
which gives free, independent investing tips to investors. This site, www.property-investment-deals.com is designed to run alongside
his original website, and will give in more detail his recommended property deals, and full details/pictures of any new deal on offer.