Green shoots?

K

kilty

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I notice that the newspapers are again carrying ads for overseas property, as well as articles extolling the good points of various developments. Dermot Condon had pieces in recent editions of SBP about overseas investments.
Is this wishful thinking on behalf of overseas agencies, or are we seeing the first signs of companies putting their heads above the parapet?
 
I would suspect that it is more to do with newspapers trying to boost their advertising revenues with "advertorials" etc rather than anything to do with green shoots. This recession has a long way to go yet!
 
To be honest, I'd steer clear of overseas property for some time, given all the scare stories.

The London market is picking up strongly, and with the euro still well above its long term value against the pound, it could be worth a punt particularly on some where near the new Cross Rail or upgraded Thameslink routes
 
I agree London is the place to invest the only problem is that it you will only get about 55% mortgage
 
lopin10 said:
I agree London is the place to invest the only problem is that it you will only get about 55% mortgage
Click to expand...

What's the typical yield available in London?

You need to be on 8%+ yield to make property a worthwhile investment. It will bottom at 8-10% typical yield but I feel we are some way off that at the moment.
 
Yield of 8% are only good when your mortgage rate is less than 4%. Currently I am getting 6% yield but my bowerings are at 2%. Cheapest buy to let mortgage rate in UK is now heading for 6%. You need 10% yield to cover these mortgage repayments and other expences. In my opinion the gap between mortgage interest and yield should be at least 4%
 
lopin10 said:
Yield of 8% are only good when your mortgage rate is less than 4%. Currently I am getting 6% yield but my bowerings are at 2%. Cheapest buy to let mortgage rate in UK is now heading for 6%. You need 10% yield to cover these mortgage repayments and other expences. In my opinion the gap between mortgage interest and yield should be at least 4%
Click to expand...

And that is why UK property is still overvalued. The return does not cover the costs or provide any margin for the extra risk taken on over that of holding cash or fixed income (not that I like these either).

There is still a good 15-20% fall in values or rise in rents required to bring UK property yields up to a level that represents a market bottom.

Give it 3 years and we should be reaching the bottom.
 
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