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Spain pipped to the post by Ireland!
Incidentally the tip for the coming year, from our friends at HPC is ….. London. I can’t see the London crash happening like that nor so quickly.. but no doubt Jake will correct me. 🙂
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@DBMarcos99 wrote:
Incidentally the tip for the coming year, from our friends at HPC is ….. London. I can’t see the London crash happening like that nor so quickly.. but no doubt Jake will correct me. 🙂
I would say that Milton Keynes will definitely get it in the neck in the next few years with sharp falls in property prices. Milton Keynes shares many similarities to Spain in that it doesn’t have much of an economy, there are few businesses there, and there are load of estates consisting of many houses and so there is plenty of properties in MK. That is why the property market in Milton Keynes will experience the same fate as Spain and for very similar reasons. There is a chronic over supply of properties there and there will be collapsing demand together with the fact that there are no industries or businesses worth speaking about in Milton Keynes except for the McLaren Formula one racing team headquarters that is based in Milton Keynes.
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@angie wrote:
Strange how the Telegraph describes places to lose your money as the ’10 BEST places to lose your money in property’, you’d think they would be described as ‘the 10 WORST places to lose your money’
Losing money would be a worst case scenario, just a thought 🙄
Maybe the editorial policy is NEVER to use the adjective ‘worst’ as regards property investment, in case it upsets advertisers? 😉
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Interesting- I am in the happy position of having homes in both Spain and Ireland!
Am I concerned? Not in the slightest-as a non-investor I would have replaced my home in Ireland if sold,whether at a higher or lower cost is immaterial,and the amount by which my Spanish property has dropped in 5 years is close enough to the rent I would have paid for a similar property over the same period -but,as I say,interesting -
I can’t see a huge fall in property prices in the UK but if it happened it can be very useful to trade up as with anywhere.
For example, if someone lives in a £250k property and wishes to move up to a £500k property they have to find another £250k.
However, it the market falls by 30%, the £250k property drops to £175k and the £500k property drops to £350k which results in having to find an extra £175k instead of £250k, the £75k saving is worthwhile so it can have it’s benefits.
Especially in the more active, I think, UK market, price falls should not deter people from trying to move.
Possibly different though in Spain with many properties not selling at all, but could this be a way for house trapped sellers to part exchange or trade up to more prestigious developments and increasing their asset worth? Maybe developers in Spain should be prepared to accept part exchanges, some could be knocked down later and smarter units built, just a thought 🙄
Agreed about wrong choice of adjective in article 😕
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UK property will hold most of it’s value because there is a crisis of supply. Not enough properties available at prices ordinary people can afford. Until that situation changes and how likely is that, prices will remain stable.
It’s basic economics. The population will always need a place to live. Demand stable. Supply critical.
In Spain it’s entirely different. There are two distinct and dominant markets. Both now in a critical condition of over supply and zero demand.
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Logan, I totally agree with the supply and demand reason as to why prices will hold up in the UK compared to places like Spain and I can’t see the crash that Jake predicts although I do remember a pretty severe crash in Thatcher’s time around 25%.
I’ve never quite understood why Spain doesn’t have the same part exchange mentality with it’s developers as can be found in the UK, it’s another way of helping markets during downturns. I’m sure lots of house trapped Brits in Spain would relish even the merest chance of at least moving to a new property in Spain obviously with a cash adjustment.
A good reason then to bulldoze the crappy builds that obliterate the landscape and build smaller better quality developments. 😉
Any chance of me becoming Spain’s new Minister of Part Exchange, what would my salary and perks be, would I be in the Government’s Old Pals Act and have a top villa and yacht moored in Banus, not forgetting a really fat pension pot? 😆
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@DBMarcos99 wrote:
Spain pipped to the post by Ireland!
Incidentally the tip for the coming year, from our friends at HPC is ….. London. I can’t see the London crash happening like that nor so quickly.. but no doubt Jake will correct me. 🙂
It is unlikely that house prices in London will fall by very much in event of a crash because of the relentless rise in inflation that has occurred since 1997 when the Bank of England effectively took over monetary policy and was given the power to set interest rates. Since then there has been a huge rise in inflation and the purchasing power of the Pound has easily been reduced by half. Therefore, even if a property crash were to occur it is unlikely that property prices will ever go back to what they were prior to the boom having started in 1997.
There was a housing boom followed by a recession and property crash back in the mid seventies but the crash in property prices was obscured by high inflation which meant that actual houses prices did not fall because the prices kept up with wage inflation, although in real terms taking inflation into account prices did fall.
This time round if a crash were to occur it will be similar to what happened in the mid seventies in that actual house prices won’t fall by much because they would just have kept up with inflation but in real terms, taking inflation into account, they will have fallen.
The properties in London that will lose value in a crash are ones that people don’t want to live in and they are studio flats and one bedroom flats and two bedroom houses, whereas three bedroom houses won’t drop in value by much because they are in demand and besides if they fall too much in value it will only result in the buy-to-let people snapping up the bargains which will force house prices back up again.
The people on the hpc website want a crash to occur to bring house prices back to the traditional three times income multiples but this is just not going to happen especially in London as the three times income multiples is just a relic of the past and house prices in London will remain permanently high because of the increase in inflation that has taken place since 1997 and so the next crash will just be a repetition of the crash that occurred in the mid seventies where house prices simply kept up with high inflation and in actual terms did not drop.
All this means is that good three bedroom houses in London will retain their value even in event of an economic holocaust because the prices will only have kept up with the inflation that has occurred since the Bank of England took control of setting interest rates back in 1997.
The recent advent of the buy-to-let phenomenon has put a floor on how far house prices will fall, particularly in London, because if house prices fall too far the buy-to-let people will step in and snap up the bargains forcing house prices back up. The increased availability of mortgage products nowadays means that people will be more able to get a mortgage than they were able to get in the past which will ensure that house prices won’t fall too far. In recent years there has been very high levels of immigration and this will ensure that the demand for property will remain high which will prevent a dramatic fall in house prices, particularly in London.
I blame the entire UK housing boom on that idiot Gordon Brown who gave the Bank of England the power to set interest rates, which in my opinion was the worst decision he could possibly have made since it was like putting Dracula in charge of the blood bank. Since gaining the power to set interest rates the Bank of England has just encouraged the mother of all house price booms by continually loosening monetary policy and lowering interest rates which added fuel to the housing boom and now the British economy is just like a runaway express train that is running faster and faster and is about to run out of track and hit the buffers and come to abrupt halt causing the British economy to go off the edge of a cliff and into the abyss.
Britain no longer has an economy. The economy seems entirely dependent on housing nowadays. Much of Britain’s manufacturing base was destroyed in the recession of the early 1980’s and the recession of the early 1990’s destroyed much of Britain’s service sector which means that Britain barely has an economy at all. All the New Labour Government did since gaining power in 1997 following the devastating recession of the early 1990’s was to create a massive house price boom which was easy to do since the economy was basically flattened and wiped out in the recession which left the housing market in a devastated state and house prices at rock bottom, waiting for idiots like Gordon Brown and Tony Blair to come along and pump it all back up again just like Nigel Lawson did in the 1980’s. New Labour, old Tory!
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We are really happy here in Ireland…. it should be ‘best places to live’, as it’s great….!
And, my Dad luckily got this place far cheaper than it would have been in the boom. He lost out in Spain with a bad buy so luckily gained here.
I would say though that it would be better to buy in Ireland than in Spain, less sun I can confirm…..but nice neighbours, friendly, less stress etc.
I am fluent in Spanish but there is something to be said about living in a place where they speak your language, even with a strong accent! Day to day dealing with officials whilst translating everything in your head gets tiring.
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