Bottoming Out Of The Property Market
High Net Worth Investors are calling the “Bottom of the Property Market” and are set to back their perceptions with hard cash.
A report by Barclays Wealth and the Economist Intelligence Unit entitled Prospects for Property: On Solid Foundations? shows that the rich think the price of houses and other properties is set to soar.
The renewed confidence in residential and commercial property comes as Nationwide's house price index, the most closely watched measure, is also showing gains.
Of the 2000 high net worth individuals who were surveyed, twice as many (35%) plan to increase their property allocation than decrease (17%) it over the next two years. Rory Gilbert at Barclays Wealth said: “The tumble in property values has shaken the confidence of even the most seasoned investors. Despite this, these findings suggest that investors believe we are approaching the beginning of the end of the downturn.”
This is backed up with figures from LSL Property Services, annual returns on buy-to-let property have just turned positive for the first time since the credit crisis started in August 2007.
LSL calculates that if a landlord purchased a property in November 2008 theywould have made a return of 2.4%.
The return is modest, but the last time buying a house or flat would have generated a positive return at all was July 2007. Buying between August 2007 and October 2008 would have resulted in a loss.
But annual rents are starting to stabilise and as a result buy-to-let investors are coming back to the market. According to the Council of Mortgage Lenders, buy-to-let mortgage lending increased by 10% in the three months to the end of September.
Article Courtesy of Ross Quin @ Morgan Grey
