Property Crash? Andy Shaw comments…
I knew Andy Shaw wouldn’t be able to resist on the dreadful headlines about the property market for long, and I was not disappointed. If you can’t believe a man who, with his partner Greg, has built up a property portfolio worth over £30 million, then who can you believe eh? Andy says….
“I was doing some research the other day for our business Passive, and I was asked to find some research from a recognised professional that backed up my argument about the fact that the country is not over geared despite what the media says.
Well here’s quite a good one that I thought you’d like too -
http://www.guardian.co.uk/business/2008/jan/12/housingmarket.houseprices
Martin Ellis is the chief economist of Halifax and he is stating that the property market is now worth £4 trillion, which is three times the UK’s annual output. And it shows household debt at what is commonly thought to be a staggering £1.3 trillion.
Now I have been trying to say that for years but never got round to looking for the figures to back up what I was saying. So, really basically, if you look at the country as just a person, it is worth £4 trillion, and has £1.3 Trillion of debt 
So our mortgage and household debt, cars, loans, credit cards, the lot, gears us as a whole to 33% of our equity.
Can you tell me what loan to value the banks consider virtually zero risk lending?
Well different banks view it in different ways. Allied Irish view 70% as virtually zero risk, while Nationwide view 65% as virtually zero risk. Some banks go down to as low as 50% before they view it as virtually zero risk. But we as a population are at 33%, which is well below the risk criteria of even the most conservative of banks.
What does this say to you about the way the media and the government view the extraordinary high levels of consumer debt? It says to me: scaremongering. ……
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Discover How Two Men Turned £10k On A Credit Card Into £37 million Plus, In The UK, In Just A Few Years…. |
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Our mate, Andy Shaw. |
Ha! File this one under “Great comments from the top of the bubble.” Right up there with “Housing will never go down!” and “It’s a new paradigm!”
Then you can look back on it in 3-4 years and have a nice laugh.
-Erica (coming to you from San Jose, CA - where property values just dropped by 12.5% in two months: http://www.erica.biz/2008/bay-area-real-estate-wait-2-months-save-50000/ )
Dear Erica, thanks for your comment. I have been and had a look at your blog which is thought provoking and excellent and, like me, you are genuinely trying to give good content. So I’ve come back and amended my original reply, which reacted a bit to the rather aggressive tone of your comment. On you blog you tell us that this is one of your strategies to get more traffic to your blog and hey! it worked - you got one more unique visitor (me).
I still have three questions points for you…..
1. How much property do you own? You say you own a condo but do you invest in property yourself? Andy owns over £30 million pounds worth ($60 million dollars) along with his partner Greg, owns more on his own, and he and Greg buy for, look after and manage a lot lot more for friends, family and clients. Including mine. He is still buying
2. When did property ever go down except little dips in “crashes”. In the late 80’s / early 90’s I think prices dipped by 3% in one year, but recovered swiftly. If you study property prices over time the relentless march has been upwards at an average of 10% per annum. I appreciate that the USA is a different market to the UK - more land, less people - and that the sub-prime situation is making things worse over there, but the professional property investors I know are buying in the USA with increased enthusiasm. They are making their profit on the way in.
3) There may be bubbles in over inflated areas where new build is rife and over supplied, but if you buy existing stock, with a proven value, in areas of heavy demand, near hospitals, universities and other high population density areas, the demand will continue and the prices will rise over time.Because the professional investors are in property for the long haul.
Cheers
Nicola