House prices - still falling?

B

Beancounter1980

Active member
Hi guys,

I need to free up some cash, and I was looking to sell an existing rented property to acquire a much more profitable property for investment.

I had the house valued, and it was valued 30k below what it was valued at when the Recession started to take hold in Oct 2009.. :cry:

I am making next to nothing on the house, and the money could easily have been used to fund another acquisition. But if I sell now, I will easily make a 20k loss. I have decided to obviously let the mortgage be paid off by the current existing tenants.

I don't really know how else I can stump up the cash I want. Borrowing against the house is an option, and I may even consider selling the Zed (Wife wont be too happy!).

I was hoping to sell the rented house as it is way too much headache than it is worth for such little return.

hmmm...
 
I have never invested in anything I don't understand, and the UK housing market is the weirdest one I have ever come across.

My investments have generally been more abroad in Europe where the markets are more stable.

It does sound like you need to be in this house for the duration though before you get your money back ...
 
can only suggest waiting it out, the sad thing is house prices will probably rocket up near where the got to before the financial melt down, i dont expect that will be for another 10 years though!
 
'Nationally' they are up between 5.3% and 9.7% for the last 12 months, depending on which index you look at
 
IMO they have stabilised now, probably creep slowly up along with the econemy as a whole.

For example but property is worth about what I paid for it 4 years ago, its gone up and done about £25k in that time. I guess you need to look at the next investment and see if that is low enough in price to make the difference worth it, i.e people moan about their house being worth 30% less now, but if they upgraded then their new house will also be 30% cheaper, and say you go from a £150k place to a £300k place your saving alot of money. Hope that makes sense.

Also though remember as long as the current place is covering the mortgage then its a good long term investment, once the mortgage is paid off it will still rake in rent money and have a large asset value if you wanted to sell.
 
Our economy is making great leaps forward here, the house prices are climbing rapidly so consider us a leading indicator. The UK has to follow eventually, once people stop hiding and start spending, the whole thing will pick up. Our oil mega projects are "go" again. I think the correction is basically over. Now we just have to control the idiots in New York if that is possible.
 
Funny enough, we are in a process of selling & buying.

There are some that believes a second crush is around the corner. This will of course be a result of further economic down turn resulting in lack of demand (due to lack of affordability + mortgage) & increased supply (due to builders getting rid of their stock, repo, sale of assets by strugglers).

I personally dont believe its coming. The economy is stabilizing, interest rate is already low and many of bad credit/weak business has already gone bust. Just like Barclays bank, businesses that survived the credit crunch will engulf the weak & grow in size. This will probably create a bigger gap between the rich & the poor - and this will be the biigest stumbling block to the economic recovery and how government will address this will be crucial I think.

So the recovery/down turn will be very slow either way- but also no dramatic disaster. Probably a good time to buy a family home, but as an investment, housing market will be far too stagnant.

p.s. I'm not an economist, so please dont take me seriously.
 
They are on the up it seems, but the more they go up, the more likely they will come down again in the coming year or so in my opinion.

Either way, if you need the cash now, I'd sell up soon ish. If you don't, wait it out.


Any investment is a risk as we all know, but I think right now houses really are long-termers... short-term I wouldn't want to bet on anything and I'm sure that is why lenders still want a decent LTV's for decent rates, and why the rates offered are still miles above the base rate vs what they were!

Dave
 
Interesting. We had a great presentation at work a few weeks back and they looked back at the early 90s. In the construction industry, it took 6 years post-election for public spending to get back to where it had been, and 9 years for private spending to do the same.

:o

I think the right property in the right location will continue to sell OK, but I wouldn't bet on anyone retiring any time soon as a property millionaire.
 
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