Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
The stock market fails to rally each day. What’s next for stocks - 14th Dec 18
How Low Could the S&P 500 Go? - 14th Dec 18
An Industrial to Stock Trade: Is Boeing a BUY Here? - 14th Dec 18
Will the Arrest of Huawei Executive Derail Trade War Truce? - 14th Dec 18
Trump vs the Fed: Who Wins? - 13th Dec 18
Expect Gold & Silver to Pullback Before the Next Move Higher - 13th Dec 18
Dollar Index Trends, USDJPY Setting Up - 13th Dec 18
While The Stocks Bulls Fiddle With The 'Fundamentals,' Rome Burns - 13th Dec 18
The Historic Role of Silver - 13th Dec 18
Natural Gas Price Setup for a Big Move Lower - 13th Dec 18
How to Get 20% Off Morrisons Weekly Supermarket Shopping - 13th Dec 18
Gold Price Analysis: Closer To A Significant Monetary Event - 13th Dec 18
Where is the Stock Market Santa Claus Rally? - 12th Dec 18
Politics and Economics in Times of Crisis - 12th Dec 18
Owning Precious Metals in an IRA - 12th Dec 18
Ways to Improve the Value of Your Home - 12th Dec 18
Theresa May No Confidence Vote, Next Tory Leader Betting Market Analysis and Forecasts - 12th Dec 18
Gold & Global Financial Crisis Redux - 12th Dec 18
Wow Your Neighbours With the Best Christmas Projector Lights for Holidays 2018! - 12th Dec 18
Stock Market Topping Formation as Risks Rise Around the World - 11th Dec 18
The Amazing Story of Gold to Gold Stocks Ratios - 11th Dec 18
Stock Market Medium term Bullish, But Long Term Risk:Reward is Bearish - 11th Dec 18
Is a Deleveraging Event about to Unfold in the Stock Market? - 11th Dec 18
Making Money through Property Investment - 11th Dec 18
Brexit: What Will it Mean for Exchange Rates? - 11th Dec 18
United States Facing Climate Change Severe Water Stress - 10th Dec 18
Waiting for Gold Price to Erupt - 10th Dec 18
Stock Market Key Support Being Re-Tested - 10th Dec 18
May BrExit Deal Tory MP Votes Forecast, Betting Market Analysis - 10th Dec 18
Listen to What Gold is Telling You - 10th Dec 18
The Stock Market’s Long Term Outlook is Changing - 10th Dec 18
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

London Property Market Sees Brave Bet By Norway As Foxtons Profits Plunge

Housing-Market / UK Housing Mar 08, 2018 - 06:42 PM GMT

By: GoldCore

Housing-Market

– Sales in London property market at ‘historic lows’
– 65% fall in pre-tax profits in 2017 to £6.5m reported by London estate agents Foxtons
– Foxtons warns 2018 will ‘remain challenging’ for London property
– Norway’s sovereign wealth fund is backing London’s property market
– RICS: UK property stock hits record low as buyer demand falls
– Own physical gold to hedge falls in physical property


The world’s biggest sovereign state fund is backing the London property market. The news comes at a time when the UK capital’s real estate market is reportedly at ‘historic lows’ with conditions expected to remain challenging.

There is a risk that Norway’s investment decision will end up being famous example of buyer’s remorse. Activity in both the London and UK housing market continues to slow, new buyer enquiries are at an 11-month consecutive low and agreed sales are down for the sixth month.

There appears to be little sign of recovery given Brexit-jitters and the resulting damage from years of rampant inflation that has pushed prices out of the reach of many.

Norway is possibly out on its own when it comes to confidence in the London property market. Foxton’s and the Royal Institute of Chartered Surveyors (Rics) are indicating that not only has the last year been tough but that it is set to continue into 2018.

This makes for a tough situation for those who have little option to be involved in the UK property market or not. Many don’t realise that even if they do not own a property, they are still exposed to the risks involved in a housing crash. A downturn or total collapse of the property market would not just affect homeowners and mortgage providers. It would send major waves through the rest of the economy.

London property agent Foxton’s sees ‘historic lows’ 

Foxton’s profits for 2017 took a 65% hit thanks to a slowdown in the real estate market. Whilst they say that this was in line with expectations, few can have expected it to be this tough and to continue into 2018.

The fall in profits has been blamed on Brexit uncertainty and stamp duty changes. These factors along with highly inflated prices have have driven sales in the capital to near record lows. Overall it is political uncertainty which currently appears to be preventing anyone from making any new moves on the housing ladder.

A new survey of estate agents has shown that in London we are seeing the chronic housing shortage most concentrated. Rics’s monthly residential market survey found that the average number of properties on estate agents’ books has hit a record low and is “unlikely to improve”. In the good times estate agents will have around 42 properties on its books, London branches are now reported to have just 33.

Source: Telegraph

Property website Rightmove says London property owners need to be aware that the capital has moved out of its boom phase. Sellers must be more realistic about the prices they are likely to sell for given they have fallen for the sixth month in a row. In the fourth quarter of 2017 London property prices fell by a sharp 4.3%. This was the worst quarterly performance since the financial crisis.

The boom time was always going to come to an end. The surge in London property was thanks to easy monetary policy by the Bank of England and debt-fuelled spending from across the world. Neither were sustainable sources of income for the capital’s property market.

The problem with London is that the boom has ended prematurely thanks to Brexit. Whilst many could predict the end of a boom created by tightening of lending, increased interest rates and unaffordable housing stock, no one knows how the likes of Brexit and a tricky political climate will really affect things.

For most this is makes for an uncomfortable environment. Many are holding off from making expensive mistakes whilst major companies are getting out whilst they can. One notable exception is the world’s largest sovereign wealth fund.

Norway backs London property but is anyone else?

Unlisted real estate makes up 2.6% of Norway’s sovereign wealth fund. Within this London property accounts for over 22%, followed by New York and Paris.

In contrast to many companies’ opinions on London, the fund’s Chief Executive Officer told a press conference that they would continue to be bullish about the London market for the foreseeable future. This positivity will remain “regardless of what the outcome of the political discussion will be” over Brexit.

Not everyone is feeling the love for London. The sovereign fund’s commitment comes at a time when major players in the City are making plans to clear some space in the capital. London, they believe, may no longer be able to hold its own as a financial hub.

Earlier this year both Deutsche Bank AG and Credit Suisse announced plans to move some positions out of London to Frankfurt. Credit Suisse’s Urs Rohner has warned that banks have just a matter of weeks to act on any Brexit contingency plans once the final package has been announced.

Source: Bloomberg

Use gold to hedge the London property market

Figuring out how to effectively hedge property investments can be difficult. Luckily physical gold comes into its own. Thanks to its relationship with increasingly correlated interest rates and economic cycles, it may likely act as a good hedge in a downturn or indeed in a full blown London property crash.

As stated at the beginning exposure to a potential property crisis does not just come about if you own or rent a property. All investors, savers and consumers are exposed, as we all have dependencies on the UK banking, financial and economic systems. All of which would be vulnerable in a property crash.

You can take some heart from the fact that the crash will not happen overnight. Investors and savers have time to get their affairs in order. They have time to diversify and decide on a reasonable allocation to gold bullion. When choosing to invest in bullion choose to own physical gold coins and bars held in allocated and segregated storage in safer, less debt laden jurisdictions.

Gold Prices (LBMA AM)

08 Mar: USD 1,325.40, GBP 955.08 & EUR 1,070.39 per ounce
07 Mar: USD 1,332.50, GBP 960.07 & EUR 1,071.86 per ounce
06 Mar: USD 1,324.95, GBP 957.01 & EUR 1,074.00 per ounce
05 Mar: USD 1,326.30, GBP 958.78 & EUR 1,075.63 per ounce
02 Mar: USD 1,316.75, GBP 955.70 & EUR 1,071.04 per ounce
01 Mar: USD 1,311.25, GBP 953.80 & EUR 1,075.75 per ounce

Silver Prices (LBMA)

08 Mar: USD 16.48, GBP 11.89 & EUR 13.31 per ounce
07 Mar: USD 16.65, GBP 12.01 & EUR 13.42 per ounce
06 Mar: USD 16.62, GBP 11.96 & EUR 13.41 per ounce
05 Mar: USD 16.51, GBP 11.95 & EUR 13.42 per ounce
02 Mar: USD 16.45, GBP 11.92 & EUR 13.36 per ounce
01 Mar: USD 16.32, GBP 11.87 & EUR 13.39 per ounce

Mark O'Byrne

Executive Director

This update can be found on the GoldCore blog here.

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W http://www.goldcore.com/uk/

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information containd in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules