Hi,

Agree that the doomsters that they get a lot of coverage...Capital Economics are always referred to by the BBC, to back up their negative coverage. I guess we may have talked our way into a down turn for listening to this constant beat of negativity.

As an investor, my take is:

1999 - 2007: Great time to invest...and thanks to all those kind banks willing to lend me their money. What a way to gear their money. Appreciate its paper profit, so not getting over excited. But better to invest the banks money than my own.

Now, I am geared to around 70% and comfortable with that.
Rates are dropping - this give me additional cash flow, and reduced vulnerability. I dont think rates will fall a full 1 point, as the Bank have to tackle inflation.

Rental Yields - I saw a 5% increase in 2007, and I see rental rates going on up - I am adding another 4% increase from Jan 08...I always rent slightly below market value. (rental market where I am is very boyont in places like Basingstoke- had around 20-25 calls for 1 place!) For my UK investments, I bought houses rather than city centre flats. Mostly 1 bed houses (singles/copules), and 3 bad houses (families).

B2L market unravelling - Dont agree with Richard's analysis due to lower Capital Gains coming into effect. Most investors are long term, and with rising rental -why sell into a sticky market? I accept that the mortgage market and companies like Paragon are struggling, and the rest are tightening up, but this is a good thing.

So who knows what will happen in 2008/09 and beyond. I would read all the predictions and take it with a pinch of salt. I have followed the likes of Hometrack; Nationwide; Halifax; RICS; and so on for a number of years, and they seem to be some way off.

Good luck...

Falls will be uneven but so also were price rises. In % terms counties like Cornwall have been near the top, but probably will also experience big falls (I have a part property there too!)

The argument that rents will rise as prices fall is totally irrelavent because if we have a housing recession, many of the Polish tradesmen will return home, I know several now who are really disappointed about the £/zloty exchange rate. CEE will be a better place to invest for the next 5 years I think

http: / /www .ft .com /cms /s /0 /784122d6 -b8d4 -11dc -893b -0000779fd2ac .html?nclick _check=1

When looking at the following url ...... remember that this is ONLY for 2008 - the beginning of the decline.

http: / /www .ft .com /cms /s /0 /feaf1b4a -b88c -11dc -893b -0000779fd2ac .html

We can all throw in web site links to predictions....good and bad.

Like politics, I am fairly passive to predictions.

I for one will be holding in 2008. Why sell into a stagnant market, and get cheeky offers from others trying to capitalise on me?

For me the entry/exit fees are too high (tenant void period whilst selling; stamp duty; conveyencing/ estate agent fees/CGT/ mortgage redeption etc etc....).

The facts are that:

1. Rents are rising.
2. Demand is high especially in the South, UK.
3. Interest rates are falling;
4. Unemployment remains historically low (yes there may be a load of redundancies in the City, and where's our manufacturing sector gone?)
5. Inflation is historically low (yes this will rise with high energy costs etc).

I have met many people burnt in previous years fearing big declines, and moving into rented accomodation, and are now saying "I told you so". They are now well and truely out, and cant afford to get back in.

I'm in for the long haul and always have been...I dont buy into the mass hysteria of Capital Economics.

Richard, good to see you back with your predictions of doom and gloom. Happy New Year!

As for predictions - who knows?

Exchange rates - Euro/£ was down at around 1.30 not so long ago (in last 3 years) and recovered. My guess is that it will continue to trade between 1.35 and 1.45. Yes, this may make completions more expensive but it makes properties already owned more valuable in £.

As for the dollar, I seem to remember you forecasting $2.40 plus. You seem to have changed your mind. A lot of experts were saying the same but now predictions are for a fall to around $1.75. Again, who knows. As longs as you invest for the long term it doesn't make that much difference.

Property Crash - it won't happen however often you predict it. Yes a slowdown but no crash. Lower interest rates and supply and demand will dictate.

Despite the incompetence of Brown the economy isn't in bad shape. No signs of big job losses which would indicate an on-coming recession, corporate earnings are good. The credit crunch will affect some big mergers but most medium/small businesses will be OK.

Perhaps for a bit of fun we should create a thread for predictions on here (interest rates, unemployment etc) and see what happens at the end of the year?
Huw

"Perhaps for a bit of fun we should create a thread for predictions on here (interest rates, unemployment etc) and see what happens at the end of the year? "

Good idea - I will get my dart board out :)

Looks like London Rents have started to fall ..... it was only a matter of time.

Now all those overleveraged BTL wishful thinkers will have to contend with falling rents as well as falling prices.

Primelocation’s price index summary stated that .....

Monthly rents are declining month-on-month by 0.2 per cent and average annual price growth fell to just 2.7 per cent in November, down from a peak 11.7 per cent in August 2007, according to Primelocation’s price index summary.

The company’s Ian Springett says: “Rental values have slowed over the last few months as the supply of available property to rent builds to record levels. However, the market is anticipating an injection of demand over the coming months, as potential buyers wait for prices to fall further in the sales market, meanwhile renting temporarily. This may yet arrest the decline in rental values currently being witnessed.”

That last line is the reality .... a certainty even. And this situation will happen across the country as the evidence will show over the coming months.

Those of you who have been voting down my star rating will be eating your words. I should not have expected anything less from a forum full of BTL investors with vested interests.

Rental Yields - I saw a 5% increase in 2007, and I see rental rates going on up - I am adding another 4% increase from Jan 08...I always rent slightly below market value. (rental market where I am is very boyont in places like Basingstoke- had around 20-25 calls for 1 place!) For my UK investments, I bought houses rather than city centre flats. Mostly 1 bed houses (singles/copules), and 3 bad houses (families).


LOL!!

Do so if you can ..... just dont expect to keep your tenants since the market will be gradually reducing their rents as excess supply kicks in.

All those people letting their homes - rather than selling.

DO you really think that these rent prices are sustainable???

Get real folks.

1. Rising Fuel / Electricity / Gas / Water / Council tax / Food

Wages increasing more slowly than REAL inflation.

RENTS WILL FALL FAST.

We are chasing our tails down down into a house price crash and subsequent recession.

WAKE UP AND FACE REALITY.

Ignore the signs at your peril.

Ignore me if you want ...... fine.

But if you ignore the most negative public sentiment since the last big recession then you deserve to lose your shirt.

People are now living on credit cards ..... literally living on borrowed time.

Feb / March will be full of harsh news and it will slowly get worse from there.

I work in the Finance industry - I am of an indicator species.