Too Much Positive News
Here is the news on property:
- Nationwide report prices rises AGAIN for the FOURTH month in a row
- Mortgage approvals highest for SEVENTEEN months
- Rightmove report record activity on their site in their history of being live
- Housebuilders such as Persimmon and Bovis share prices up by up to 237%!!!
Now before you get too excited these percentages come from a really low starting figure so while they are good looking percentages the absolute figures are not so exciting. Sorry to be a doomster but it is good to get a balanced view on the whole thing.
The key point is this news is being reported. Most people do not understand stats like me and hopefully you so it is just the news that causes people to act rather than the real true figures.
The other thing that puts a dampner on the figures is that fundamentals always apply. So even if everyone reads the great news about how property prices are recovering and they go out and try to buy the reality soon becomes clear when they get refused for a mortgage or find out there are no 90% residential mortgages.
My explanation for the slight price rises are that the sensible buyers who can actually buy can see this period in time as a massive opportunity and are risking their life savings, their parent?s life savings or someone?s life savings (!) to actually buy now before prices rise. Lucky them.
For the rest who cannot get mortgages or do not have a hefty deposit all we can do is surf Rightmove to see, in theory, what they could buy. I am sure mortgage brokers must be busy however they cannot be earning much if lenders are not lendeing.
I managed to get some funds out today for a property I am buying. £25,000 purchase price and will rent out for £300. Not so great but ok. How long these bargains will last I am not sure.
Article Courtesy of Ajay Ahuja
