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  • Property-a-holics

    House prices to rise 25% in five years, claims new report

    House prices will rise by a quarter over the next five years predicts a major report, as the property market booms back into positive territory.

    Such an increase would see the average price of a home in the UK reach nearly £280,000, said the Centre for Economics and Business Research (CEBR).

    While this will undoubtedly be welcome news to the UK's property owners, it is another blow to young people trying to find a way onto the property ladder.

    And that will be even tougher in London, where average prices are expected to skyrocket from £395,000 to £566,000 by 2018.

    The average full time salary is £26,500 and would need to grow by 25 per cent in five years if it is to keep up with the property market.

    Source article >>> here.

    Some of this has been blamed on the Help to Buy Scheme, which has been brought forwards by three months.

    [Image: house.png]Related bubble content:

    Bad news. Another housing bubble is on the way.

    Forget in investing in bricks n' mortar. Just invest in bricks!

    Demand for new homes reaches 50 year high!

    More that 600K homes needed in the private rented sector by 2016

    A perfect property storm is brewing

    Wot?!? No housing bubble?!?
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    25% in 5 years is slower than doubling in 10 years.

    Frankly, some parts of London have seen 25% over the credit crunch.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    This is the bonus and the icing on the cake for the high leverage high cash flow investment model.

    At the turn of the year I had a desk top valuation on one of my better properties from an agent whose judgement I trust. 10 mths on that valuation is now 50K or 25% higher and he says he has a buyer waiting in the wings to take it off my hands.

    Human housing fever will frenzilly drive this market.
    We have been cooped for up too long
    .
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    Jonathan Clarke. http://www.buytoletmk.com


    (02-10-2013 06:31 AM)Jonathan Clarke Wrote:  This is the bonus and the icing on the cake for the high leverage high cash flow investment model.

    The amount of leverage has nothing to do with the headline. 25% is the growth in the value, not the return on equity for an owner. No leverage would see the same growth.
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.


    (02-10-2013 03:27 PM)john_corey Wrote:  
    (02-10-2013 06:31 AM)Jonathan Clarke Wrote:  This is the bonus and the icing on the cake for the high leverage high cash flow investment model.

    The amount of leverage has nothing to do with the headline. 25% is the growth in the value, not the return on equity for an owner. No leverage would see the same growth.

    Maybe you misunderstood my sentiment John

    25% on a 200K property = 50K
    25% on a 200K portfolio leverage @75% LTV = 200K

    Therefore 150K more worth of icing.
    Boy this cake is going to taste good
    .
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    Jonathan Clarke. http://www.buytoletmk.com


    I have to be honest and say that I haven't witnessed any price rise where I am (northwest). Prices are still as they were since 2009.

    I think it will take longer in this area. Hope I'm wrong!
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    (02-10-2013 07:03 AM)DaddyLandlord Wrote:  I have to be honest and say that I haven't witnessed any price rise where I am (northwest). Prices are still as they were since 2009.

    I think it will take longer in this area. Hope I'm wrong!

    Buy now then and take advantage when the ripple does reach you
    Have faith
    .
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    Jonathan Clarke. http://www.buytoletmk.com

    (02-10-2013 07:15 AM)Jonathan Clarke Wrote:  Buy now then and take advantage when the ripple does reach you
    Have faith
    .

    Does that mean making a slightly higher offer than you normally would... As I have seen a dog of a property which I can easily convert into three bedrooms but my offer has been turned down...

    Is this now the time to bag the deal with a slightly higher offer....
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    DaddyLandlord -

    In 2006, we had an analyst from Hometrack present to us on the property market.

    He should lots of historical examples of the ripple effect.

    Basically, whatever happens in London, ripples out to the far reaches of the UK, but the time lag is up to 4 years, the further away you go.

    So in 1998, London was booming, but it was 2002 before the North picked up.

    Expect a similar situation now. It will come, but maybe 12-18 months away.
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    Agree with John, a 25% increase in 5 years equates to 5.7% growth per annum (once compounding is taken into account); doubling in 10 years means 8% pa. So yes, the market may be rising again but to describe it as "skyrocketing" is perhaps an exaggeration.

    I'm seeing evidence of the ripple effect in Birmingham - prices certainly seem to be rising here over the past year or so.
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    [Image: 75pxLogo.jpg]

    http://www.brumhomes.co.uk / Facebook

    Local to Birmingham/Solihull? Join our Facebook private rentals group:

    http://www.facebook.com/groups/RentalBhamSol/

    Twitter: @RentalBhamSol

    I sold a portfolio in the northwest that i had built up from early 1994 in 2000, no escallation in values but great yields.
    Worked in a mortgage brokers affiliated with the police from 2000 and was getting loads of enquirys re buy2let,equity release due to rising values but up north we hadnt seen it.started buying again late 2002 and by early jan the market was mental.like it was on steroids.
    Monthly price increases and you couldnt keep up with it.
    This continued til 2005, a brief lull then a rise again til 2007, then the rest is history
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