Is it time to cash in your UK property chips?
If you look in the UK property news you will see talk of further increases to come, easy money and a raft of investors waiting to buy yet more property. The situation has never been better, the UK government is injecting more finance into the sector and even the Royal Institute of Chartered Surveyors (RICS) is showing serious concern about the ongoing house price bubble. So, would you be mad to consider cashing in your UK property chips and looking elsewhere?
The fact is this is beginning to feel as though we are in a self-fulfilling prophecy with everybody talking UK house prices higher despite the fact that the economy is still struggling, although starting to improve, and austerity measures have yet to reach their maximum impact. So, does it sound so bizarre to sell UK property and look elsewhere?
Overseas property
If we look across Europe and North America we see a number of troubled property markets with the likes of Greece in particular still on the verge of financial collapse. The situation for some property markets in these areas has never been more difficult, investors are running for the hills and prices continue to fall. Is this now the time to be looking at bottom fishing overseas property assets?
Quote from PropertyForum.com : “While there were more than enough reasons already to worry about whether the UK property sector was heading for a boom and bust scenario, today’s announcement that Rightmove has upgraded its forecasts for house price growth for 2013 is alarming.”
They say that it is always darkest before the dawn well if you look across Europe, North America and an array of individual countries around the world, could it get any darker? The Spanish government has been forced to offer residency for those acquiring properties over a predetermined threshold, the Portuguese government is set to follow suit while at the same time rumours continue to persist of yet more property taxes in the short to medium term.
The simple fact is that Spain and Portugal, to take two examples, would be crazy to tempt investors in with residency visas while at the same time looking to tax them even further on their property investments.
Looking towards the longer term
It is looking more and more likely that the euro is over the worst, the European economy is starting to improve and while finances may get worse before they get better across many European governments, there are small signs of recovery. The US government has suggested a possible reduction in its fiscal stimulus programs but at this moment in time this does not look to be a certain bet.
The simple fact is that governments around the world will need to rein in their budgets, they will need short-term pain but this should hopefully result in long-term gain which will eventually impact upon local economies and property markets. Even though many investors in the UK are rubbing their hands with glee anticipating yet more gains in the short to medium term, this is not guaranteed. As we suggested above, the UK property market is being talked higher and higher and is in many ways starting to feel like a self-fulfilling prophecy. But who will be brave enough to end the prophecy?