by The Investor on April 4, 2008
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More evidence that house prices are really falling comes from the Nationwide building society, in its latest official house price index.
While it tries to draw attention more to annual figures in the accompanying commentary, which are still very much up, the quarterly figures for January to March 2008 are dreadful. House prices haven’t fallen across every region of the UK like this since the early 1970s:
| Region |
Q1 08 |
| Scotland |
-0.1% |
| North |
-0.7% |
| East Midlands |
-0.8% |
| Outer South East |
-0.9% |
| Yorkshire and Humberside |
-0.9% |
| Outer Metropolitan |
-1.4% |
| East Anglia |
-1.4% |
| London |
-1.5% |
| Wales |
-1.8% |
| North West |
-2.3% |
| West Midlands |
-2.5% |
| South West |
-2.5% |
| Northern Ireland |
-10.0% |
| UK |
-1.7% |
A few points:
- The negative spin would be that just as the bubble had spread out across the whole of the UK (instead of it being only London and the South East that went crazed, as in previous years), this time it’s bursting everywhere.
- If you were more bullish, you might say the uniformity of the falls reflects the impact of lenders making mortgages more expensive, rather than any particular changes in demand…
- …but still, doesn’t that drop in Northern Ireland of 10% have all the hallmarks of a bubble bursting?
You can download the first quarter 2008 figures from Nationwide as a PDF, or just the figures for March.
by The Investor on February 13, 2008
by The Investor on September 26, 2007
THE SCENE: A beautiful couple – they might be models fresh from a home shopping catalogue photoshoot – relax in their sixth-floor two-bedroom, two-bathroom, new build apartment.
He is in the kitchen area, mixing up mojitos on the island unit. She is on the balcony, gazing across the city landscape (an out-of-focus backdrop of railway tracks, supermarket car parks and the back of the block next door). And unseen in these shiny advertisements is the Buy-To-Let (BTL) investor in the suburbs, tearing her hair out as she tries to make the maths work.
Welcome to the bursting edge of Britain’s housing bubble. Get out while you can.
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by The Investor on September 3, 2007
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.”
Robert Frost
Whether to buy your own home or not is a tricky question for anyone wanting financial freedom.
Now that might seem to some a mad statement; in most English speaking countries, buying a house to live in is a rite-of-passage, and while these days renting doesn’t quite conjure up visions of a harried mother washing tired clothes in a tin bath while four kids sleep head-to-toe in a single bed behind her, it’s still frowned upon.
Indeed – and ironically – the British love affair with property has blossomed into Buy-To-Let (BTL), where renting is perfectly acceptable as long as it’s not you doing the renting. These nouveau landlords had better hope the rental sector doesn’t return to its bad old image of multi-occupancy squalor and sordid bedsits. (When most people want to buy their own home, just like you, it’s a daydream to believe that sufficient millions of your peers will put this aspiration aside just to rent from hundreds of thousands of similar new BTL investors and make you all rich.)
But leaving aside for now being a landlord – which can certainly make great money if you buy at the right price – what are the pros and cons of owning your own home to live in?
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by The Investor on September 2, 2007
Buying a house in Britain today costs a lot more than renting it. Fair enough, you might think: Home owners have seen prices triple in the past decade, so it’s understandable that it should cost more to buy your suburban castle and so potentially profit than to merely rent it. But wait a minute: If renting a house is cheaper than buying, how is the landlord going to make any money?
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