13:15 PM, 3rd November 2010, About 12 years ago
Most property investors think they have never had it so bad as spending cuts, lack of finance, and the prospect of tumbling house prices loom.
Brits have an insular grin-and-bear-it tendency that tends to make their lives seem worse, but the truth is we are inching through a global recession and this country is by no means the worst off.
Looking at some key indicators for investors across the world reflects the state of the UK markets:
The banking crisis: A self-inflicted horror by the banks that spent years lying through their teeth while smiling politely at each other as guys in the back-room were coming up with ever more devious ways to package toxic debts to sell to their rivals.
Now they are scared to take up security offered to support borrowing in case they are duped again.
Finding independent analysis of global mortgage lending is difficult, but figures from the central banks in the US, UK and Europe are more or less in line with each other.
Interest rates In most of the world’s leading finance centres interest rates are 1% or less (see current chart), so here the UK nestles between the US (0.25%), Japan (0.10%), and the Eurozone (1%).
House prices The Economist has just released an annual review of house prices in 20 major housing markets. The league table is slightly distorted by having three separate indices for the US. Click here to view.
The analysis puts the UK in at 16th, showing a 3% increase over the year to the end of September from a 3% decrease at the same time last year. The Economist reports that UK house prices are still overvalued when factored against long-term averages and price-to-rents ratios.
Top of the table is Singapore, with home values soaring 23.1% in the year after an 11% fall the previous period.
Sweden, Belgium, France, Germany, and Switzerland lead the way for Europe, taking 5th to 9th places in the table.
Ireland props up the rest of the world with prices plunging 17% year-on-year following a 13.8% drubbing the year before.
Other negative entries are Italy, Spain, Japan, and the USA.
Life may not be that good in the UK for property investors – but maybe they should count their blessing rather than their misfortunes.
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