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Dear Investor,
I am presently flying back from Cyprus having spent the past 2 weeks observing the progress of the Grove Spa Resort and having a series of business meetings. I also had time to meet up with some friends and also “test drive” a new villa I recently completed on, so it wasn’t all hard work.
Back in the UK Henry and the team have been finalising an offer we are to make to administrators on Friday for a number of repossessed properties in London. They represent excellent value, particularly at a time when prices are now rising. In The Times today there is an article on page 46 titled
“Off-plan buyers return as London property perks up”
We have recently had reports from both Nationwide and Halifax of rising prices. Savills have reported a rise in prices of London prime property of 4.3% between March and June due to “pent-up demand and improved buyer sentiment.”
Another key indicator of the strengthening market is the closing of the gap between asking prices and prices paid. Research by Marsh and Parsons has shown the gap has narrowed from 8.7% in January 2009 to 3.9% in July. Also, the key measure of affordability in the property market, the house prices to earnings ratio, is reported by Halifax to have declined from a peak of 5.84 in July 2007 to an estimated 4.36 in July 2009. The long-term average is 4.0.
So what does this add up to? Well, predictions from analysts such as Capital Economics of a further fall of 20% in UK property prices appear to be quite wide of the mark. Even with tight lending and fewer mortgages, prices in the main are stabilising. The “freefall” in my view is over. What we will see is a series of monthly rises and falls, but it will be the overall trend which we need to follow, not the monthly data. Three months data (Nationwide reporting the prices have risen in the UK for the past 3 months) in my view does not make a trend, but the stabilising effect it has on sentiment is the key.
I am in London tomorrow for a series of meetings about a new business idea I have which will enable us to purchase large quantities of bank repossessed stock. Crucially, we want to do this before the banks decide to hold out for better prices, which will be inevitable as the market returns to growth, albeit subdued in the short term. These are very exciting times and the opportunities are stunning, but the window of opportunity is getting narrower.
Invest Now In London
We are in the process of acquiring a further tranche of properties in Zones 1 and 2 in London. The properties have been repossessed and the value in terms of price is excellent with prices between £200,000 and £350,000 with yields varying from 6% to 8%. If you are interested in investing in this prime London stock please fill in the form at:
www.distressed-assets.co.uk
We close both the Liverpool and Cyprus offices for two weeks beginning Friday 7th August. However, given the pace at the moment the Distressed Assets desk will be manned as sensitive negotiations with banks and LPA receivers are ongoing.
If you are going away for a holiday, enjoy your time off.
Best wishes
Regards
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