Here's Who's Buying Those Insanely Expensive Homes In London

This article by Joe Weisenthal of Business Insider on October 28th, 2013 reveals the interested parties who are buying the insanely  expensive homes in London.

The insanely-hot London housing market has become the subject of global fascination.

But who's buying it all?

Deutsche Bank is out with a new report on the London housing market, and it includes this fascinating chart, which breaks down origin of purchaser by price range.

As you can see, at the low end, the dominant share of buyers is domestic UK buyers.

But at the high end, UK-based purchasers make up a tiny slice of the pie. A massive swath of the buyers is Eastern European or Russian. Chinese and Middle Eastern buyers are also quite significant. Chinese buyers actually make up a bigger purchase of the slightly cheaper ranges.

So basically, tons of Chinese buyers at the expensive levels, and then at the ultra-rich level it's a lot of Russian and Eastern European money.

Deutsche Bank, Knight Frank

And as for why they're buying so much.

Lots for investments, and some are buying for their children.

Deutsche Bank

Article Source: http://www.businessinsider.com/whos-buying-london-property-2013-10

Mortgage Approvals Rise Ahead of ‘Help to Buy’

This engaging article by Lucy Tesseras of Marketing Week on October 24th, 2013 tells us that Help to Buy scheme could open doors to brands but could damaged consumer trust.

A rivival in the property market thanks to government schemes such as Help to Buy could open new doors for brands, but damaged consumer trust and squeezed disposable incomes requires a fresh marketing approach. 

 

Above: Furniture company BoConcept is tapping into the market where people can’t afford to move and so need to use the space they do have more effectively. It has seen a huge uptake of its free interior design service it launched to raise its brand profile

Signs that the property market is recovering may feel like a boon to businesses related to the sector, but brands must meet this potential mini-boom with new strategies, according to marketers from companies including Santander, retailer Furniture Village and estate agent Savills.

Mortgage lending, house prices and transactions are beginning to bounce back thanks in part to government incentives including the Help to Buy scheme, which means marketers will have to adapt quickly. House building was up 6 per cent in the second quarter of the year, while mortgage debt dropped by £15.4bn, according to the Bank of England. This will greatly affect industries beyond those that deal solely with the buying and selling of houses.

The £12bn Help to Buy scheme continues to be the cause of much debate both inside and outside government. Some parties expect it to fuel recovery and open up the market for first-time buyers, while others are against it, fearing it could create another pricing bubble.

Despite a Bloomberg survey of 31 economists finding that two-thirds believe it is a “bad” move, there is interest from consumers. The Royal Bank of Scotland is offering loans under the scheme and booked 5,000 mortgage appointments within three hours of the scheme being launched on 8 October; appointments doubled to 10,000 after four days – twice the number it typically expects.

Either way, there is movement in the sector so a level of adjustment is necessary in the way brands communicate with consumers.

Santander, which will begin offering mortgages under the scheme in the new year, has embarked on a big marketing push for its existing mortgage products. The ads are fronted by Formula One champion Jenson Button and their tone is very different from previous ones.

“The market has realised that price is not the be-all and end-all,” says Keith Moor, director of brand and communications. “Consumers are much more savvy. It’s a value judgement now. They understand that going with the cheapest doesn’t necessarily mean going with the best.

It’s still a competitive market and you have to be priced in the game to play it but companies are increasingly realising that leading on that one dimension is not wise. Banks have a big job to do to rebuild trust and part of that is not forcing people to make big decisions based solely on price.”

This year, Ikea launched its ’Make small spaces big’ campaign in the UK and Ireland after finding that homes here are 15 per cent smaller than in Europe

Santander’s approach this time is based on insight about how consumers feel about mortgages. As they are a long-term investment, people fear it will be a noose around their neck.

“To answer that concern we have launched a range of mortgages that give people more freedom. People are free to overpay within the mortgage, but people are also free to leave whenever they want. It’s tapping into insight rather than the commoditised approach based on price,” says Moor.

Other banks are taking a similar tack. Lloyds Bank kicked off a £30m marketing campaign following its rebrand from Lloyds TSB in September, which focuses on the ‘moments that matter’. One example is an ad that tells the story of a 31-year-old man who is relieved of the frustrations of having to live with his parents after getting a mortgage through the bank. Barclays has based its proposition around listening to customers’ ideas, while TSB has relaunched with the message: ‘welcome back to local banking’.

Signs of initial recovery in the housing market have sparked renewed interest from investors too, encouraging estate agents Foxtons and Countrywide, as well as housebuilder Crest Nicholson, to float on the stock exchange. There has also been speculation that property website Zoopla is contemplating an IPO after it appointed Credit Suisse to explore “strategic opportunities”, though the Daily Mail and General Trust-owned business has downplayed such talk.

Zoopla estimates that the second phase of Help to Buy could reduce mortgage debt by £22.1bn. Its research finds there are 665,000 eligible homes on the market with an average price of £222,168. Under the mortgage guarantee scheme, the deposit needed to buy a property has dropped by two-thirds to £11,108.

As a result, property searches are going to be at an all-time high over the next year, according to the company, so it will be investing heavily to tap into consumer interest.
“First-time buyers are arguably the most important segment of the property market, as they allow those further up the chain to move, which creates supply and fluidity in the market,” says Charlotte Harper, marketing director of Zoopla Property Group. The company also owns PrimeLocation and has acquired four property portals from Trinity Mirror to compete with market leader Rightmove.

People spend more on their homes in the first 6 months than in the next 5 years so any growth in the property market is good news for us

Although the government schemes will not affect Zoopla’s marketing activity directly, says Harper, it is likely to influence some of the content it produces to ensure consumers have up-to-date information and understand the likely consequences of being involved in such a scheme (see Q&A).

The company became a sponsor of Premier League team West Bromwich Albion last season, which has helped it widen its reach and profile in the UK. It also launched its largest marketing campaign to date at the beginning of September, which incorporates outdoor ads for the first

time in addition to a major TV push. The multi-million pound ‘Smart’ campaign illustrates key features of the website’s property search, such as data about proximity to local schools and transport links.

“With the property market beginning to turn, consumers are looking for guidance and information in order to help them make better property-related decisions,” she says. “Our Smart campaign seeks to own the rational side of home-buying and help people to make confident and informed choices within that process.”

While some analysts have predicted the Help to Buy mortgage guarantee initiative will lead to another property boom, specialists at Savills and Knight Frank believe that idea might be premature.

Yolande Barnes, director of residential research at Savills, said in the firm’s Q3 market analysis: “Despite all the talk of an artificially induced housing boom, resulting from Help to Buy and other government measures, this infant housing market is far from performing like the previous housing cycle did [in 2006/2007]. We are still far from a housing market boom, although the next three years may look like a mini boom in relation to the past five.”

Knight Frank associate John Waters has a similar view but nonetheless is positive about the market.

“I don’t think it is likely to cause a pricing bubble,” he says. “Central London has been quite solid for the past few years in terms of pricing, but outside of London it is a very different story. As the broader economy improves, prices will begin to rise outside of the capital a lot more than they have done for a long time. I think it will help the market to recover and it will certainly help many people outside of London that are in negative equity to get back to where they were.”

Santander will offer mortgages under the Help to Buy scheme from early next year

Lynda Clark, editor of First Time Buyer magazine, which hosts the First Time Buyer Home Show in London, confirms that consumer’s interest is on the increase as both registrations and exhibitor numbers are “markedly up”.

“Help to Buy is making the prospect of owning a home more affordable for people, even in central London where prices are much higher than elsewhere in the country. I know there’s lots of controversy about it, but anything that helps somebody buy their own home, which will be one of the biggest purchases of their life, has got to be a good thing,” she says.

An uplift in the property market will benefit home retailers too. Charlie Harrison, marketing and ecommerce director at Furniture Village, says: “We know that people spend more on their homes in the first six months [after moving in] than in the next 5 years, so any growth in the property market is good news for furniture retailers.”

He expects to see many more first-time buyers entering the market following the launch of the second stage of Help to Buy and has been scaling up accordingly.

“We have been increasing our range of fast delivery items and introduced more lines that are available to take home the same day, such as vacuum packed mattresses that fit into a car. Furniture Village offers an interest-free credit option, which is also popular with customers furnishing their first home, and we will continue to include this as a key promotional message.”

While budgets might be tight, Capital Economics property economist Matthew Pointon does expect the fortunes of home retailers to bounce back if the housing market improves.

“When the number of transactions rise you tend to get an increase in spending on things such as white goods and home improvements as people do up their homes. I’m not sure we’ve seen much evidence of that occurring just yet but it is certainly what I would expect to happen if transactions really take off,” he says.

However, he is doubtful the mortgage guarantee aspect of Help to Buy will help to fuel the industry as much as the government believes, since the monthly payments on a 95 per cent mortgage could make it more expensive than renting.

“We’re not convinced it’s going to lead to a huge increase in buyers. Even though you can get a mortgage with a 5 per cent deposit, you still need to pass strict affordability checks in order to obtain them. Concerns that there is going to be a stampede of demand are exaggerated,” he adds.

Retailers may have another crack at the whip though, because over the past year while transactions have been down, people have turned their attention to renovating existing homes by building extensions, redecorating and generally improving their home environment.

Furniture Village, Ikea and BoConcept have all tapped into the idea of making better use of space in the realisation that not everyone has been in a position to move up the property ladder.

Harrison says: “As a result of the ‘don’t move, improve’ trend, Furniture Village has expanded its range of items that help homeowners make the most of their existing space. Products with hidden storage, such as ottoman beds, are proving popular and we have also seen an increase in sales of compact kitchen dining.”

Likewise, Ikea launched its ‘Make Small Spaces Big’ campaign in the UK and Ireland this summer after learning that homes in Britain are 15 per cent smaller than in Europe. Its global sales jumped 3.1 per cent to €27.9bn in the year to the end of August, although it does not separate UK figures.

BoConcept has seen a “huge increase” in the uptake of its free interior design service in the UK, according to country manager Zoe Shields.

“A trained member of the BoConcept sales team visits the customer’s home, measures the space and works with them to find the best possible solutions,” she says. They are then invited back to the store where they are presented with “mood boards, 3D design drawings and a set-up to reflect the products they have selected”.

As the market picks up, BoConcept will be looking to partner with local estate agents to offer the service to their clients and will also promote options such as deferred payment.
In June, B&Q launched a campaign urging homeowners to turn their attention to ‘unloved’ rooms. The retailer struggled in the early part of the year, blaming bad weather for the poor sales. But B&Q owner Kingfisher was more positive at the half-way point with a 4.3 per cent rise in group sales.

”With the property market beginning to turn, consumers are looking for guidance and information in order to help make better decisions.” - Charlotte Harper, managing director, Zoopla Property Group

Group chief executive Ian Cheshire says: “We remain ready to capitalise on any improvement in conditions or opportunities as they arise, including the potential pick-up in the UK housing market.”

However, Sainsbury’s chief executive Justin King is not so positive. He believes UK consumers are likely to have less disposable income this time next year as inflation will be around 3 per cent, while average wages will increase by 1 per cent. Despite the bleak outlook, the retailer has posted a 4.4 per cent lift in total sales for the first half of 2013.

“Although we are starting to see encouraging signs in key economic indicators, our customers’ approach to savvy shopping, which started at the beginning of the downturn, has persisted and continues,” he said in a statement.

The economic downturn has made consumers more cautious, which means companies need to be smarter in their communication.

“Whether there is a boom or not, I don’t think we will see organisations promoting in the same way,” says Santander’s Moor. “It is incumbent on us all to be responsible in the way that we lend and the conversations that we have with customers. Everyone is much more responsible than they used to be and that’s partly because consumers are more cautious but also because organisations need to address some of the concerns, fears and trust issues that people have, particularly with banks.”

Article Source: http://www.marketingweek.co.uk/trends/propertys-path-of-potential/4008241.article

Concerns that UK is Fueling Property Market

This interesting article by The Irish Times on October 8th, 2013 reveals how the UK's government help-to-buy scheme allows people to buy a home with a deposit of as little as 5%.

UK Chancellor of the Exchequer George Osborne began the second phase of his mortgage-boosting plan as concerns persist that it will fuel a property bubble.

Royal Bank of Scotland’s Natwest unit and Lloyds Banking Group ’s Halifax and Bank of Scotland will start offering Help-to-Buy mortgages this week, with Virgin Money Holdings and Aldermore Bank planning to start in 2014, the Treasury in London said in a statement today. 

The program allows people to buy a home costing as much as £600,000 pounds (€709,000) with a deposit of as little as 5 per cent. The first phase came into effect in April, and Prime Minister David Cameron last week brought forward the start of the second from January, dismissing criticism that the plan may help fuel a bubble. 

Halifax said this month that house prices rose for an eighth month in September and lawmaker Andrew Tyrie, who heads the Parliament’s Treasury Committee, said today that intervention in the property market risks causing distortions. 

“The government has yet to allay the committee’s concerns,” Mr Tyrie, a member of Cameron’s Conservative Party, said. “Given the checkered history of interventions in residential property, great care will need to be taken in both the construction and running of this scheme.” 

Under the mortgage plan, the government guarantees as much as 15 per cent of the purchase price in return for a fee from the lender. Fees will be charged as a percentage of the original loan amount and be reset every year. For 2014, they will range from 28 basis points, or 0.28 percentage points, for mortgages between 80 per cent and 85 per cent of the value of the property, to 90 basis points for loans between 90 per cent and 95 per cent, Osborne said in a written statement to lawmakers today. 

Cameron said today the government “had to act” to help prospective homebuyers.

“Too many hardworking people are finding it impossible to buy their own home,” he said. “Buying your first home is about far more than four walls to sleep at night. It’s somewhere to put down roots and raise a family. It’s an investment for the future.” 

Halifax customers will be able to apply for mortgages under the program starting October 11th. The bank is offering a two-year fixed-rate of 5.19 per cent. That’s more than the 1.94 per cent fixed rate it offers first-time buyers who can put down a 40 per cent deposit, according to the bank’s website. Similarly, RBS is offering two- and five-year fixed rates at 4.99 per cent and 5.49 per cent. That compares with a two-year fixed-rate of 1.95 per cent for first-time buyers who are able to put down a 40 per cent deposit, according to its website. HSBC said in an e-mailed statement today that it will also participate in Help to Buy later this year. 

Article Source:  http://www.irishtimes.com/business/sectors/financial-services/concerns-that-uk-is-fueling-property-market-1.1553937

Buying into Britain

This interesting article by Chen Dujuan of Global Times on September 15th, 2013 shows the milestone of Chinese investment in Great Britain.

Two years ago, the BBC made a TV documentary called "The Chinese are coming," focusing on growing Chinese investment in Africa and South America. Now, the Chinese are coming again, but this time to the home country of the BBC: Britain.

Many of the country's well-known brands have been either wholly acquired or bought into by Chinese firms, including Weetabix, Thames Water and Heathrow Airport.

"There are around 500 Chinese companies currently investing in Britain and taking advantage of the world's most open investment environment. We welcome more," Daniel Carvalho, China marketing and communications manager with the UK Trade & Investment Office at the British Embassy in Beijing, told the Global Times on Tuesday.

"I think we're seeing the beginning of a very strong trend of Chinese investment into the UK," Carvalho said.

Chinese investment in Britain reached $8 billion in 2012, more than the total from 2009 to 2011, with domestic firms expanding into areas such as high-end manufacturing, infrastructure and research, the Chinese Embassy in London said in January.

From the beginning of 2013 to early August, China has invested more than $2 billion yuan in the country, Zhou Xiaoming, minister counselor for commerce at the Chinese Embassy in Britain, was quoted as saying by the 21st Century Business Herald on August 10.

Zhou said that Chinese firms will announce new infrastructure investment worth hundreds of millions of pounds in Britain in September, the report said.

Desirable sectors 
China has made breakthroughs in infrastructure investment in Britain in recent years, partly due to local preferential policies.

In 2012, China's sovereign wealth fund China Investment Corp bought an 8.68 percent stake in Kemble, which controls Thames Water, and acquired a 10 percent stake in Heathrow Airport.

Gingko Tree Investment Ltd, a fund wholly owned by China's State Administration of Foreign Exchange, also invested in a British water utility company last year.

Companies owned by Hong Kong billionaire Li Ka-shing control 30 percent of Britain's power supply, as well as 25 percent of its natural gas and 7 percent of the water supply.

Property is another new area of interest for Chinese investors.

In July, Ping An Insurance Group bought London's landmark Lloyd's building for 260 million pounds ($411 million). 

Dalian Wanda Group in June spent around 700 million pounds to develop a real estate project in London, including two apartment buildings and a five-star luxury Wanda hotel.

In May, Beijing-based property developer Advanced Business Park signed a $1.5 billion deal with London's city government to develop Royal Albert Dock.

Wang Jianlin, chairman of Dalian Wanda, told the Beijing News in June that the real estate project is "a big bargain for Wanda," which partly explains these firms' enthusiasm for property in Britain.

The land price for the project is much cheaper than in Beijing, and the sales revenue will be far more than the investment costs, Wang said.

Frank Chen, head of research at the China office of commercial property services company CBRE, told the Global Times Tuesday that the amount of high-quality property available for investment in Asia Pacific is still limited compared with North America and Europe, so Chinese investors are expected to focus on property in gateway cities that are capable of generating reliably stable returns on investment.

Chinese companies have also shown interest in buying high-end manufacturing brands in Britain and setting up R&D centers there.

Wanda acquired a 91.81 percent stake in British yacht maker Sunseeker in June and Chinese automaker Geely bought black cab manufacturer Manganese Bronze in February.

Companies including Shanghai Automobile and Huawei Technologies have set up or expanded research centers in the country.

Local benefits
"The British economy is growing again after several years of stagnation, so the timing is right for Chinese investors," Qing Wang, professor of marketing and innovation at Warwick Business School in Britain, told the Global Times Wednesday.

She said that Britain's sound legal system and open economy as well as the status of London as an international finance and services center make the country an attractive destination in Europe for Chinese investors.

Preferential policies are also playing an important role. Britain has chosen an "open door" philosophy to foreign investment in almost all of its industrial sectors, Michele Geraci, head of research at the Global Policy Institute, a think tank under the London Metropolitan University, told the Global Times Wednesday.

"We want to be the destination for Chinese investment. Tell other Chinese investors to come to London and spend their money," British Prime Minister David Cameron told Fortune magazine in May.

Chinese companies will be made to feel welcome, and will receive the full support of the British government, the British Embassy's Carvalho said.

A competitive tax regime and highly skilled workers are Britain's other advantages, Carvalho said. "We have hundreds of billions of foreign investment in Britain, so we're used to it. It's how our economy works - we accept investment from overseas, and we also make huge investments around the world ourselves," he noted.

Wang said that both governments have set a target to boost bilateral trade, and that the two countries can combine complementary assets and competencies, offering huge potential for Chinese firms investing in Britain.

Foreign owners welcome
Qing Wang and Michele Geraci both agreed that British people are not too concerned about local firms being bought by foreign investors, so long as it brings more employment to the country.

Chinese companies that wish to invest in the UK should be prepared to be more transparent about their shareholding structure, so that the sellers know exactly who is buying their assets, Geraci said.

Carvalho suggested that foreign investors should have "a PR strategy to engage with the UK media and local communities to build trust and gain confidence." The British Embassy can offer advice on this, he noted.

It is important that Chinese firms understand and abide by the rules and regulations of the British legal and economic system, Wang said, expressing the hope that Chinese firms can develop innovative products and global brands through investing in Britain.

Zhou with the Chinese Embassy in Britain suggested that Chinese firms could take advantage of the innovative advantages in Britain and cultivate their brands there, the 21st Century Business Herald report said.

Zhou said that the eurozone crisis has offered advantageous timing for Chinese companies, which can depend upon Britain's status as an international center and its open environment to expand into the international market, according to the report.

Article Source: http://www.globaltimes.cn/content/811462.shtml#.UjZiRT_tYh8

Prices on Climb Amid Strongest Market Conditions for Six Years in UK

The market is in its best shape since the financial crisis as demand continues to outpace the number of homes for sale, adding to values, according to this recent article by South China Morning Post on September 4th, 2013.

British house price growth accelerated last month amid the strongest market conditions for six years as demand continued to outpace the number of homes for sale, Hometrack said.

Average values in England and Wales rose 0.4 per cent after a 0.3 per cent gain in July, the London-based property researcher said. Prices were up 1.8 per cent from a year earlier, the most since July 2010.

In a separate report, the Engineering Employers' Federation raised its forecasts for UK economic growth and manufacturing output.

Hometrack's survey adds to evidence of a mini-boom in the housing market, with reports last week showing values rising and mortgage approvals at their highest since 2008.

Bank of England Governor Mark Carney said he was alert to risks from the property market and policymakers would act if signs of a bubble emerged.

Richard Donnell, director of research at Hometrack, said: "A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term.

"We expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged."

Underlying market conditions are at levels not seen since the financial crisis, with the average time taken to sell a property falling to 8.1 weeks and sellers achieving 94.6 per cent of the price sought last month, Hometrack reported.

New buyers registering with real estate agents to browse property rose 1.1 per cent, the same as in July. Demand fell in August in each of the last three years. Growth in new property listings slowed to 0.8 per cent from 2.4 per cent.

Seven of the 10 regions tracked by Hometrack showed price gains, led by a 0.9 per cent increase in London. Two regions showed no change while values dropped 0.1 per cent in the northeast.

Signs of economic growth have lifted consumer confidence. The economy expanded 0.7 per cent in the second quarter, and recent data suggests the recovery is gaining traction.

A survey by the manufacturers' organisation EEF and the accounting firm BDO showed manufacturing output rose to a three-year high in the third quarter, with a gauge of production rising to 32 from 12.

A measure of investment intentions rose to 24, the highest in six years.

The group raised its forecast for manufacturing growth next year to 2.1 per cent from 1.9 per cent, following a 0.5 per cent contraction this year.

It also raised its forecast for UK gross domestic product growth to 1.2 per cent this year and 2 per cent next year, versus earlier projections of 1.1 per cent and 1.8 per cent.

"Industry's prospects have brightened considerably," said Lee Hopley, chief economist at the EEF. "There is growing confidence that improving trading conditions will continue into the final months of this year and then accelerate through the gears in 2014."

Nationwide Building Society said last week that home prices rose 0.6 per cent last month and the Bank of England's commitment to maintain record-low interest rates until at least the end of 2016 may be helping to support demand.

Article Source: http://www.scmp.com/property/international/article/1302634/prices-climb-amid-strongest-market-conditions-six-years-uk

House Price Rise Doesn't Have Any Bearing on Real Life

In this article on August 17, 2013 by Kate Hughes of The Independent discussing the value of house price rise means nothing because a house only worth what someone will pay for it and besides it's a home and you can't sell what you still need. 

Your home might be worth more on the market, but you still need somewhere to live.

Feeling better about cash, the economy and everything yet? The latest rounds of financial and economic survey data suggest we should be.

Just by way of a quick recap, unemployment is down by 4,000 to 2.51 million in the quarter to June this year, and the number of "economically inactive" people aged 16-64 in the UK was down 10,000 from the first quarter of 2013, according to the Office for National Statistics. Total pay also rose in the last year by 2.1 per cent.

Inflation is also down, very slightly, across the board, with the Consumer Prices Index down just a touch from 2.9 per cent to 2.8 per cent in July, thanks in part to the drop in leisure, cultural and clothing costs, and the Retail Prices Index, which includes housing costs, was down from 3.3 per cent to 3.1 per cent.

Meanwhile, Gross Domestic Product – the broad measure of the state of the economy – is up 0.7 per cent in the last quarter to July according to this month's estimate, following 0.6 per cent growth the quarter before.

And unless you've been in a coma this week, you'll already know that house prices are up by 3.1 per cent in the year, compared with 2.9 per cent in May. The term "escape velocity" is being used with reckless abandon. Happy days.

Except that last piece of good news in particular has no bearing on real life. First, a house is only worth what someone will pay for it, and until the money is in your account, a valuation means nothing. Some unscrupulous agents are already overegging valuations in a bid to max out their commission if it does come off, safely hidden from view by this rising tide.

Second, the British obsession with owning property means we often forget that our house may be our greatest asset, but it's a home first and foremost. And you can't sell what you still need. So unless you're not too worried about having a roof over your head, when exactly are you going to crystallise that "gain"?

Third, if you do sell to move on what difference does it make anyway as your next step on the ladder is likely to have headed the same way, unless you're moving far, which is statistically unlikely, or you are downsizing significantly.

Of course, there's the much-repeated argument about house prices, consumer confidence and economic wellbeing. But consumer confidence based on thin air puts us right back where we were a few years ago, or have we all forgotten?

Unless you have some truly altruistic wish to support the wider economy rather than yourself, go out and spend your cash when you (eventually) get a pay rise, when there is real money in your pocket, not when someone with a sharp but cheap suit tells you your house is worth 5 per cent more than it was the last time you blinked.

Finally, and most importantly, as those outside the South-east of England have learned, house prices can fall as well as rise. But historically low interest rates and pressure on banks not to repossess mean the rest of us have forgotten what that really looks like.

The average house price is now £169,624. (And here I acknowledge that "average" covers a multitude of north-south divide sins.) Meanwhile, the average UK salary before tax is £23,244. Even if there are two or more adults working full time in your household, with one far outstripping the other, this isn't rocket science. And the problem is far, far more extreme in the South-east.

I feel for first-time buyers watching property prices sprint off into the distance. But for them there should be some comfort drawn from the fact that this too is temporary.

Article Source: http://www.independent.co.uk/money/spend-save/kate-hughes-house-price-rise-doesnt-have-any-bearing-on-real-life-8772589.html

How To Become Neighbor to the Queen?

Mike Spink plans to buy the famous building from Crown Estate and convert it into a luxurious home just yards away from Buckingham Palace. 

iNVEZZ.COM Tuesday, August 6th: A new record for UK’s most expensive house is expected to be set by property tycoon Mike Spink who plans to convert 3 Carlton Garden in London into a single-family luxury mansion overlooking St James’s Park just yards from Buckingham Palace.

Spink Property in collaboration with equity group Evans Randall plans to buy the famous building from the Crown Estate for £65.5 million and convert it into a luxurious home with an initial asking price of more than £140 million. The sale is scheduled to be completed next month.

The high valuation of the London property is due to its rich history and central location in the heart of the capital. The building, located on the site of the gardens of Carlton House, has been part of the Royal Family’s estates since it was completed more than 125 year ago. During World War II it housed the Free French Forces and was often used as residence by Charles de Gaulle.

The building is currently used as office spaces, but as James Cooksey, head of St James’s and diversification portfolios at the Crown Estate, has commented for The Times, the project corresponds to their ”long-term vision for St James’s, which we see not just as a destination for business, retail and dining but also as a place to live.”

The plan’s goal is to maximise the potential of the estate by extending it into a four-storey mansion with more than 16,000 sq ft available with an estimated price of around £8,500 per sq ft. The ambitious real-estate entrepreneur Mike Spink is famous for turning the previously forgotten country mansion Park Palace into the UK’s most expensive residential estate so far. After purchasing it for £42 million and converting it into a luxurious home, he sold it in 2011 to Russian billionaire Andrey Borodin for the impressive £140 million. 

Author: Emma Scott
Article Source: http://invezz.com/news/real-estate/4601-mike-spink-investing-in-uks-most-expensive-home

Tips to Move Up the Property Investment Ladder

Another interesting article by Michael Yardney published on August 2, 2013 in Property Observer giving helpful tips to property investors to be successful in their property ventures.

Property investment is not something you should enter into lightly. But for some reason, that’s what a lot of people who have dreams of making millions with real estate do.

They think, “I can go out, buy a house somewhere, stick in some tenants to pay the mortgage and make a killing! How hard can it be?”

Fact is most property investor’s fail! The stats show that around 50% of people who buy an investment property sell up in the first five years and of those who stay in the game, 90% never get past owning one or two properties.

So if you’re looking to get into property or move up to the next rung of the property ladder, here are some words of advice:

Knowledge is property investment power!
Firstly, you need to understand what makes a good property investment and recognise that not just any old digs will do.

You can profit from real estate in one of four ways, and if you get the combination right you’ll make money from bricks and mortar. They are:

1. Capital growth – to build yourself a sound asset base your properties will need to appreciate in value at wealth-building rates (in other words, above average capital growth.) This will come from strong demand from owner-occupiers (who push up property values) and tenants (who help you pay your mortgage.)
   
2. Cash flow – in other words your rent.
   
   
3. Tax benefits – while you should never invest solely for this reason; a good tax strategy can help you manage your cash flow, decrease your tax obligations and increase your bottom line.
   
   
4. Accelerated growth – getting your hands a little dirty (metaphorically speaking) by investing in a property that needs a bit of cosmetic TLC through renovations, or a major facelift through property development, is a great way to manufacture capital growth.

Property cycles

While timing the market is not the be-all and end-all, it certainly helps to understand how the property market moves in cycles.

Following the herd and buying when everyone else is on the property bandwagon doesn’t always work. That’s often when the market is near its peak.

On the other hand you have more chance of nabbing a good deal in a buyer’s market, when property is out of favour. That’s why Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.”

Currently many of the property markets in Australia are in the early upturn stage of their cycles, creating good medium-term investment opportunities.

Location

Location can make or break a property investment. But what is the right location?
I look for areas that will have strong ongoing demand from a wealthy demographic of owner-occupiers who can afford to and are prepared to pay a premium to live in good locations. Some of the major drivers of this type of capital growth are:

• Proximity to the city
  
  
• Proximity to the sea
  
  
• Adjacent to a prime suburb
  
  
• Proximity to amenities such as a train station, large shopping centre, within the zone of a highly sought after public high school.
  
  
• Suburbs that contain period style homes e.g. Californian bungalows, Federation, Victorian, Edwardian style homes.
  

I also like buying in areas going through gentrification – a suburb that is relatively cheap now but has the potential for capital growth in the future as a wealthy demographic of people move in.

One way to find this type of location is to drive through the streets and look for some of the obvious indicators that people with money are moving in:

• Are people spending large amounts of money on renovating/extending their homes?
  
  
• Are there small black (or maybe now it’s white – the new black) BMWs and Audis parked in the driveways or are they old Ford Falcons and Holden utes?
  
  
• Is the nature of the shops changing – more cafés and deli and lifestyle shops.
  

Money, money, money

A sound financial strategy is as important as a sound investment strategy when it comes to property.

Without a well-rounded understanding of how to maximise your borrowing power, use equity as a leverage to build your portfolio and maintain a financial buffer to see you through the difficult times that we all ultimately face, you are setting yourself up to fail financially.

It’s important to set aside a cash flow buffer in a facility such as an offset account or line of credit, to cover you for a rainy day.

Financial fluency

While you could make lots of money through property investment, you could also easily lose it.

If you are financially illiterate when it comes to managing money, budgeting and even balancing the books at home, how do you think you’ll go when it comes to a multi-million dollar property portfolio?

You may need to learn the ins and outs of taxation and the financial advantages you can enjoy as an investor, as well as the best structures to own your investments in, such as personal, company and trust set-ups.

Rather than trying to learn it all yourself and wear numerous hats, it’s worth surrounding yourself with a good team of professionals who can guide you with their knowledge and expertise. An independent property strategist, a finance broker and an accountant should all be people you rely on to support you in the journey to real estate riches.

If you’re the smartest person on your team, you’re in trouble!

Some final words of advice (or warning) for investors

1. Formulate a plan – understand what you want to achieve and then make investment decisions accordingly.
   
   
2. Be cautious –you’ll find everyone is happy to give you advice. Rather than listening to well meaning friends, it’s important to only listen to people who have achieved the financial independence you’re looking for and who have maintained it for a period of time.
   
   
3. Understand the difference between a salesperson and an advisor. Many salespeople are cloaked as advisors and suggest they are representing you, the buyer, when in fact they are representing the seller or a property developer.
   
   
4. Be prepared to pay for advice – it’s much cheaper than learning from your mistakes.
   
   
5. Not everything that glistens is gold – often when you start out it can be tempting to see opportunities everywhere. The problem is you don’t yet have the perspective to decide what is a good investment and what is not.
   

Property doesn’t discriminate; it doesn’t care who owns it. Today the residential property market is worth $4.68 trillion, according to RPData, and over the next decade it will increase in value by billions and billions of dollars. If you get it right, you can have your share.

Michael Yardney is a director of Metropole Property Strategists.

Article Source: http://www.propertyobserver.com.au/landlords/tips-to-move-up-the-property-investment-ladder-michael-yardney/2013080163739

Castle to Rent for just £1,750 a month

Are you looking for a place to rent and fancied being king or queen in the castle? This article by Paul Jeeves of the Express might be the deal that you've been looking for.

Northumberland castle for rent at £1,750 per month, a bargain for seven bedrooms (PIC: NORTH NEWS)

And it’s on the rental market for the same price as a two-bedroom terrace in Wimbledon.

Sprawling seven-bedroom 19th century Bellister Castle in Northumberland has just become available for a bargain £1,750 a month.

Legend has it the castle is also home to a “grey man” who, having been unjustly accused of being a spy, was savaged to death by hounds

Local myth

Owned by the National Trust, it stands on a prominent mound in the South Tyne Valley just outside picturesque Haltwhistle and boasts mature grounds, a walled garden, stables and an orchard.

The property is part of the Bellister Estate that was given to the Trust in 1976. It is available to rent for 10 years.

The mansion house, rebuilt in 1826 by architect John Dobson, is attached to the remains of a Grade 1 listed 14th century tower house.

But some tenants might be put off by having to share with a ghost. Legend has it the castle is also home to a “grey man” – a minstrel who, having been unjustly accused of being a spy, was savaged to death by hounds as he fled.

Article Source:  http://www.express.co.uk/news/property/411109/I-m-home-darling-drop-the-drawbridge-castle-to-rent-for-just-1-750-a-month

Fixed-rate Mortgages 'are good value'

This latest article on July 31, 2013 by houseladder.co.uk shows why fixed-rate mortgages are presently good in providing value as suggested by Andy Gray.

The bottom of the interest cycle is on the horizon, it has been noted.

Fixed-rate mortgages are proving to be particularly good value at present, it has been suggested. 

Andy Gray, managing director of mortgages at Barclays, noted this is because there is a general consensus in the industry that the bottom of the interest rate cycle is on the horizon. 

Mr Gray pointed out this has coincided with a time of the year that is one of the busiest for remortgaging and house buying activity.

The comments come as Barclays has announced improvements to its home loan range in the hope of giving more opportunities to save money for remortgagers and to present a new collection of fee-free deals for those looking to buy a home. 

Mr Gray stated: "The Barclays rate cuts and new offers give even more homeowners and buyers the chance to take advantage of the low rates."
It was recently reported by the Council of Mortgage Lenders that UK gross mortgage lending in June was two per cent greater than in May, rising from £14.7 billion to £15 billion. 

Article Source:  http://www.houseladder.co.uk/Property_News/2013/07/Fixedrate_mortgages_are_good_value_3438.aspx#.UfnhQ40_tZ0

Top Tips for Real Estate Investment Success

Follow these informative and helpful property investment tips when embarking a property purchase by James Thomas of gulfnews.com.

Property investment can be one of the most rewarding forms of financial investment, offering a tangible asset with a functional purpose, whilst simultaneously offering opportunity for strong growth. With the correct advice, property is a strong inflation hedge and will complement other asset classes.

However, problems can arise when people get emotionally attached to their properties, or get caught out by foreign legal and financial systems and the potential to lose money can be just as great. To help avoid likely pitfalls, I have put together a ‘Top Ten’ guide on top tips to remember when embarking on a property purchase:

1. Understand the legalities

First and foremost, don’t get into something if you don’t fully understand the legal ramifications. Expats who snap up property in boom times under the assumption that the law would protect them, or the law was similar to that of their home country are often the ones that face the biggest challenges.

2. Do your due diligence

In many developed markets, you can get a complete transaction history online which will help you ascertain whether the property has a re-sale value. Remember, you’re not purchasing this property to live in yourself, it’s a financial investment purchased for the specific purpose of creating a long-term financial return.

3. Make sure you have access to funds

You must understand the leverage system; verbal approval for mortgage finance isn’t the same as a firm commitment. If you’ve already put down a deposit, Make sure you get an offer in principle from your bank and negotiate the best finance rate possible. Get your calculations right and weigh up what you’ll be paying in interest over the lifetime of the loan against the long term return or rental yield of the property.

4. Make sure you’re diversified

You wouldn’t invest all your money in one asset class, and it doesn’t make sense to invest all your property eggs in one basket, but to spread the risk globally.

5. The liquidity question – can you exit easily?

If you’re looking at a property investment, your number one question must be ‘who will buy this from me when I sell?’ If the answer to that question is another investor, you probably shouldn’t buy. You’ve got to buy the stock that locals want to buy, sell and rent.

6. Understand tenancy and yield

What are you going to get in terms of a real tenant and what is your yield going to be? Do some thorough research and year on year comparisons for a realistic forecast of potential rental yield.

7. Get a handle on taxation and fees

People often get into international property purchases without understanding the taxation implications. Some countries may be seen as attractive destinations because they are tax free, but legal issues surrounding ownership by foreign nationals must be explored very carefully.

8. Look for high quality buildings backed by quality developers

When you’re investing, make sure that your bricks and mortar are quite literally safe as houses. As a rule of thumb, well-built properties will maintain their value longer and will therefore be safer bets for a quick rental or sale.

9. Invest for the medium term

The principles of sound property investment are aimed at offering a medium to long-term return on investment. However, you will need patience; those who expect to flip properties in a matter of months are playing a risky game, and it is likely that they could come unstuck.

10. Work with partners you can trust

Don’t try and go it alone; you must work with people that you feel comfortable with, and who have a proven track record, whether consultants, property managers or tax experts.

James Thomas is the regional director at Acuma Independent Financial Advice, Dubai. Views expressed here are his own and do not necessarily reflect that of Gulf News.


Article Source:  http://gulfnews.com/business/property/uae/top-tips-for-real-estate-investment-success-1.1213814

Use Listed Property to Boost Savings, Pension

An interesting article by Bruce Cameron of Personal Finance on July 28, 2013 about raising your savings through use of listed property.

Listed property has come of age, producing solid returns and diversifying risk. It should be in the investment portfolio of every retirement fund and, in particular, in the investment portfolio of every pensioner. 

Property is the “warrior asset class”, Dries du Toit, a financial consultant and former chief investment officer of Sanlam Investment Management, said at the IPD annual property investment conference held in Cape Town this month. 

Du Toit says that 90 percent of asset managers have missed out on average returns of 20 percent and more a year over the past decade, simply because they ignored property.

The Alexander Forbes Large Retirement Fund Manager Watch for June 2013 shows that only three percent of retirement fund assets are invested in property. 

The listed property sector not only performed well in the context of South Africa, but it also beat property prices in all developed countries. 

Du Toit attributes the lack of asset manager interest in the local property sector to the disastrous under-performance of property in the late 1990s – it has since become the forgotten asset class. 

Currently, listed property accounts for almost four percent of the total capitalisation (value of all issued shares) of the JSE. It is expected that, with the launch of a real estate investment trust (Reit) sector on the exchange, more property companies will list on the JSE and more foreign investment will flow into the local market (see “Common structure gives investors confidence in Reits”, below). 

Du Toit says a conservative assumption is that an investment in listed property will provide a return of between eight and 12 percent a year in the immediate future, while a direct investment in commercial property should provide a return of between 10 and 14 percent a year. 

“Nothing is better than this if you are a long-term investor. 

“No pension fund, no guaranteed annuity will give you this type of return. Listed property is an ideal investment for a pensioner,” he says. 

While you are saving for retirement, you are permitted to invest a maximum of 25 percent of your savings in listed property in terms of the prudential investment requirements of the Pension Funds Act. This restriction does not apply to investment-linked living annuities, where pensioners choose how to invest their retirement savings to generate an income.

Du Toit says that a significant advantage of listed property when you save for a pension or invest your retirement savings for an income is that you do not pay income tax on the rental distributions or the capital gains. 

Du Toit says the 30-year global bull market in bonds, which has played a major role in the relatively high income provided by guaranteed annuities, has ended, because we have entered a prolonged period of low interest rates. Bond yields are dictated by prevailing and expected interest rates. 

“Interest rates will remain in single digits. Property will provide better and more stable returns than bonds in most years,” he says. 

One of the main advantages of listed property is that it provides a steady income stream of about 7.5 percent a year based on current share prices, Du Toit says. 

He says that a steadily improving income stream means that people, such as pensioners, who are on a fixed income do not have to worry about the underlying share price. 

He doubts that the listed property sector’s average return of 20 percent a year over the past decade will be repeated soon, but he strongly believes that listed property will continue to provide sound returns. 

Du Toit says that listed property has a track record of: 

* Being remarkably resilient under all market conditions. There has never been a year in which South African listed property has had negative distribution growth. 

* Providing stable and growing distributions (rental), as well as capital growth. 

* Performing well when interest rates are stable and when inflation and interest rates are falling. The biggest risk to property investments is sharply rising interest rates, because this undermines the affordability of borrowing to buy property. 

* Liquidity (it is easy to sell your investment). You can buy and sell shares in property companies and/or invest in collective investments (unit trust funds and exchange traded funds) that invest in property. If you invest directly in property, your investment is often very illiquid. 

Du Toit says it is expected that the listed property sector will receive further impetus from: 

* More property companies listing on the JSE. 

* The introduction of Reits on the JSE. Reits are likely to attract money from two sources: 

– Occupational retirement funds and retirement annuity funds. Du Toit says that listed property is a return-enhancer and plays an important part in diversifying risk in a balanced investment portfolio. 

– Offshore. South Africa, which is the world’s eighth-largest Reit market, has been added to global Reit indices. Many institutional investors are index investors, so more money is expected to flow into the local market from offshore. 

COMMON STRUCTURE GIVES INVESTORS CONFIDENCE IN REITs

 

On May 1 this year, South Africa’s listed property sector was brought into line with international standards for listed property when the JSE launched a real estate investment trust (Reit) sector. 

Reits are listed companies that own rental-producing property and distribute rental income, in the form of taxable interest, to the holders of shares or units. 

Estienne de Klerk, president of the South African Property Owners’ Association and executive director of Growthpoint, says that Reits will eventually replace listed property unit trusts (PUTs) and property loan stock (PLS) companies, simplify taxation and enhance fund governance. Growthpoint is the largest listed property company in South Africa. 

Reits are listed on some 25 international stock exchanges. They have similar rules and structures, giving investors confidence when they invest in property in a foreign market.

Reits are structured so that no income tax is payable on rental income in the hands of the listed company and no capital gains tax is paid on a gain from the sale of property owned by the company. 

Distributions, in the form of interest, are taxed in the hands of shareholders from the first cent – there are no tax exemptions on interest or rental earnings (except for retirement fund investors). This is in line with government’s move away from tax exemptions on interest, which it proposes to replace with tax-incentivised savings accounts for individuals.

In South Africa, Reits invest predominantly in retail, office, industrial, hotel and hospital properties; their exposure to residential property is limited. 

Tower Property Fund, launched by Spire Property Group, this week became the first property fund to list on the JSE under the Reit structure, joining 16 companies that listed as either PUTs or PLS companies and have now converted to Reits. 

The market capitalisation (value of all issued shares) of the JSE property sector grew from R61 billion at the end of June 2003 to R328 billion at the end of June 2013.

There are 45 property companies on the JSE, accounting for 3.8 percent of the stock exchange’s total capitalisation. 

Article Source:  http://www.iol.co.za/business/personal-finance/financial-planning/investments/use-listed-property-to-boost-savings-pension-1.1553535#.UfX2tm3tYh9

Property Investment Tips: Good vs Bad Property

In this informative video about property investment Property Expert Greville Pabst discusses the factors that differentiate a good investment property from bad property. 

Video By: WBP Property Group 
Video Source: http://www.youtube.com/watch?v=PB7ZWk-LiAg

3 Reasons Why Property Investors Should Consider the Stock Market

This July 19, 2013 article of the UK Value Investor simply states the invaluable reasons why every property investor should consider the stock market.

The UK is obsessed with property investing and the property market, but not the stock market.  The stock market is generally thought to be high risk, confusing and no place for the inexperienced.  But is that fair?

On the face of it, a preference for property seems obvious.  The reasons I hear most often are that:

• Property is simple – You can kick a house, it’s real, it’s tangible and everybody understands property
• It’s low risk – A house isn’t going anywhere, is insured if it burns down and people will always need houses
• It’s a high return investment – Prices may go down in the short-term, but in the long-run they always go up by more than inflation

On the other hand, the stock market is often seen as being the complete opposite:

• It’s mysterious – You can’t touch a share, you don’t know what companies are really doing and shares go up and down with no rhyme or reason
• It’s high risk – It’s volatile, has frequent booms and crashes, can drop by 50% in a year or two, many companies go bust and you can lose all your money
• Returns are uncertain – We’re still below the peak from the year 2000 and stock markets can go nowhere for decades

But if you dig a little deeper, it turns out that these differences are not as real as they seem.  Here are my 3 reasons why property investors should consider the stock market:

Reason 1 – Stock market investments are every bit as real as property investments

The stock market is not as mysterious as some people think.  If you ignore the stock market, what do you actually have?  You have investors, and you have businesses.  Stock market investors are actually business investors, which in many ways is not that different to being a property investor.

You might want to try this:  Drive down to your local Tesco.  Can you kick it?  Yes you can.  If you decide to kick it then you will have kicked one of my investments, and that’s my point.

“Stocks and shares” are irrelevant; what matters are the individual businesses that you can invest in, and the price that you’re willing to pay.

You might also say that nobody really understands big business; they’re too complex and that’s probably true.  But I think I have about as much understanding of Tesco as I do of how a house works.

For example, I do not know the names of each of Tesco’s 530,000 employees, but neither do I know the depth or density of the foundations of my house.  This lack of knowledge does not bother me because neither piece of information has anything to do with to the returns that these investments will produce.

However, I do know how much revenue Tesco generates, how much profit it makes, and what dividend it pays.  I also know how these have grown over the last decade or two.  And I know that, just like my house, Tesco will probably be around much longer than I will.

In both cases I have a real, tangible asset which is likely to generate a growing income in the future, and whose capital value is likely to go up in the long run faster than inflation.

I will admit that there is less uncertainty around a house than there is with most companies, but that’s okay.  It’s also much easier to diversify across many businesses via the stock market than it is to diversify across many properties.

I can easily spread my money across 30 companies, which massively reduces any uncertainty I may have about any one company.  And anybody who has been involved in property investing knows that it is not without its own level of uncertainty, with void periods, problem tenants and so on.

Reason 2 – Investing in the stock market is low risk compared to property investing

Now this really does seem counter intuitive.  House prices don’t go down by 40 or 50 percent in a couple of years like the stock market so often does.

But to compare apples with apples you have to remember that property is a geared investment; in other words you borrow to buy the house.  So let’s compare a property investment where you have put down a generous 25% deposit.

Imagine that you bought a house for £100,000 (it’s a small house) in late 2007.  Its price moves in line with the average house price in the UK.  By early 2009, in the depths of the credit crunch, the market value of that house had dropped by 18.7% (in line with the UK market as a whole, according to figures from Nationwide), which is a loss in value of £18,700.

Remember that your investment was £25,000, so an £18,700 drop is actually a 74.8% loss, relative to the amount you invested.

That’s far bigger than the 48% loss suffered by the FTSE 100 at the same time.  Let me say that again:

Between 2007 and 2009, a conservative property investment using a 25% deposit lost almost 75% of its value compared to a 48% loss in the stock market.

Property investments are typically far more risky than stock market investments.  You have to remember to look at the value of your equity in a property, rather than the total value of that property.

Higher risk isn’t necessarily a bad thing, as the borrowed money allows you to invest more for much higher overall returns, but it’s important to understand the facts.  Property is a high risk investment, with potentially massive rewards if you stick with it for the long-term, but potentially devastating losses if you can’t.

What most property investors will say, quite rightly, is that even if the price of a property falls, you don’t have to sell.

As long as you invested wisely and have a cash-flow positive property you can just sit there, collect your net cash income every month, and forget about falling property values.  In a few years the property market will likely recover, and your property’s value will march upwards once more.  That’s true, but once again the same thing is true of the stock market.

If property investors can ride out falling prices by ignoring the market and collecting an income, then so can stock market investors.  There is absolutely no difference.

• If property prices fall, so what?  Collect your rental income and buy more property while prices are low and rental yields are high.
• If the stock market falls, so what?  Collect your dividends and buy businesses while prices are low and dividend and earnings yields are high.

Reason 3 – In the long-run the stock market is just as likely to go up as property

I’m sure that after the last few years most people realise that property prices can go down as well as up, just like the stock market.  And as I noted above, most property investments are more risky and more volatile than the stock market, despite what everybody thinks.

But for sensible investors, it isn’t short-term volatility that matters, it’s the long-term, and most people think that property will do much better in the long-term than the stock market.

But history does not bear this out.

If you invest over a multi-decade period you’re likely to get inflation beating returns from both income and capital gains, whether you invest in the property market or the stock market.

That’s what happened in most parts of the world over the last century, and it’s reasonable to expect that it will be the story of the future too.

In fact, without gearing, the stock market generally performs better in the long-run than property, but with the advantage of borrowed money, property does better if you can live with the hassle and risks involved.

Over the long-run, the stock market and the property market have both proven themselves as sound investments for those who invest wisely in good assets at low prices.

The fact that the FTSE 100 is still below its year 2000 high is irrelevant.  That just shows how ridiculously overvalued some businesses were at the time.  If you spent the first year of this millennium buying high quality businesses at a discount to their intrinsic value, and avoiding insanely overpriced dot-com businesses, then your portfolio today could easily be double what it was back then.

The property market and the stock market are more similar than most people think

Fundamentally, property investing and stock market investing (or business investing as is should really be called) are not so very different.

While the details may differ, the same timeless principles remain:

• Buy good quality assets at low prices
• Hold them for a number of years and receive a good income
• Occasionally sell an asset, if you are offered a price that you cannot refuse

Author: John Kingham

Article Source: http://www.ukvalueinvestor.com/2013/07/3-reasons-why-property-investors-should-consider-the-stock-market.html/