I chose UK and the US as my favourite property destinations. Why? There are a few countries in the world where the governments are trying to reflate property prices: UK definitely. US yes. Europe? The governments are bankrupt. Otherwise they'd have done the same. I usually buy homes in these countries. Yes I know that London isn't cheap any more. The net yield is not fantastic. Price to income ratio is between 11 - 13x. I should buy a single-family home in Arizona, which has a price to income ratio of 3 - 5x. But government policies act like winds against my sails. I can ride it on the way up. Although I invested in both countries, I put in far more in London than in New York or the States. You see, capital gains tax, other taxes are also a big factor. Capital gains tax lowers my IRR.
I usually invest less in countries where the governments are trying to curb the rise in price. Singapore is one big example. I've stopped for now. Malaysia increasingly is going to lower LTVs. Hong Kong and China totally cannot buy.
Australia and New Zealand are in neutral territory. Their property prices never fall that much and are now rising. Check out New Zealand. No capital gains tax. Some cities are far from the earthquake zones. Do your homework.
Postings on investments, soccer and life in general. 分享股票，债券和房地产投资的想法.
Thursday, 18 April 2013
Help To Buy Equity and Mortgage Guarantee Scheme to Boost England's Property Prices in the Next Three Years!
The UK government recently announced a Help-To-Buy Equity Scheme which comprises a budget of GBP140 billion and is expected to last from 2014 - 2016. For as little as 5% deposit and for homes of up to GBP600k, buyers can step on the property ladder. Unfortunately, this scheme is available only for new homes.
However, the Help-to-Buy mortgage guarantee is a guarantee by the UK government to lenders in case the borrower defaults. It is available for off-plan and resale properties. However, the minimum deposit is not guaranteed at 5% but set by lenders. I reckon it will bring mortgage rates down and LTV up from 75% to between 80 and 90%.
It will boost property prices in England. Developers especially will rejoice because people with very little savings can now purchase a property. The developers may raise prices by 10 - 20% because to a buyer, a 10 percentage point increase in price only leads to a 0.5% increase in downpayment. But I'm not sure if it will lead to a housing bubble three years down the road. I recently secured a tenant for my flat at Pierhead Lock and my gross yield is 5.3%. Net yield is around 3.5%. My carry is only 0.2%. However, there's scope for UK's mortgage rate to fall to 2.2% in my opinion so my carry will increase to 1.3%.
I bought two homes, one off-plan and one resale. I eagerly await my property prices to rise.
http://www.barratthomes.co.uk/offers/help-to-buy/Help-to-Buy-Terms-and-Conditions/
Help to Buy
The Chancellor announced a £5.4 billion package of financial support to tackle long-term problems in the housing market at Budget, including the launch of Help to Buy - which offers two schemes aimed at helping those who want to get on, or move up, the housing ladder. This FAQ answers some of your questions about the scheme.
Help to Buy: mortgage guarantee will be available from January 2014. The Government will provide further details about the scheme later in the year.
However, the Help-to-Buy mortgage guarantee is a guarantee by the UK government to lenders in case the borrower defaults. It is available for off-plan and resale properties. However, the minimum deposit is not guaranteed at 5% but set by lenders. I reckon it will bring mortgage rates down and LTV up from 75% to between 80 and 90%.
It will boost property prices in England. Developers especially will rejoice because people with very little savings can now purchase a property. The developers may raise prices by 10 - 20% because to a buyer, a 10 percentage point increase in price only leads to a 0.5% increase in downpayment. But I'm not sure if it will lead to a housing bubble three years down the road. I recently secured a tenant for my flat at Pierhead Lock and my gross yield is 5.3%. Net yield is around 3.5%. My carry is only 0.2%. However, there's scope for UK's mortgage rate to fall to 2.2% in my opinion so my carry will increase to 1.3%.
I bought two homes, one off-plan and one resale. I eagerly await my property prices to rise.
http://www.barratthomes.co.uk/offers/help-to-buy/Help-to-Buy-Terms-and-Conditions/
Help to Buy
The Chancellor announced a £5.4 billion package of financial support to tackle long-term problems in the housing market at Budget, including the launch of Help to Buy - which offers two schemes aimed at helping those who want to get on, or move up, the housing ladder. This FAQ answers some of your questions about the scheme.
What is Help to Buy?
Help to Buy is made up of two schemes – “equity loan” where the Government will loan you up to 20% of the value of your new build home and “mortgage guarantee” where lenders will be incentivised to make more mortgages available for people with small deposits.Why has the Government set up these schemes?
The Government wants to help more people across the country make the aspiration of home ownership a reality. Help to Buy is aimed at increasing the supply of low-deposit mortgages as well as new housing.Can I buy a house using Help to Buy?
If you have a 5% deposit and want to buy a new build home, you’ll be able to access the Help to Buy: equity loan scheme from 1 April 2013. If you want to buy a property which is either new build or an existing property, the Help to Buy: mortgage guarantee will be available from January 2014.What if I don’t have a deposit – can I still get a mortgage?
To access a Help to Buy product, buyers will need a minimum 5% deposit.Am I guaranteed to get a mortgage? Are there any criteria I need to meet?
For both schemes, borrowers will need to meet appropriate tests to ensure they can pay back the mortgage, as well passing their chosen lender’s credit and affordability checks.How much can I borrow?
Subject to meeting the eligibility criteria and affordability checks, you’ll be able to use either Help to Buy scheme to purchase a property with a value up to £600,000.Can existing homeowners access the scheme?
Yes. Both schemes are available to home movers as well as first-time-buyers, subject to meeting the relevant eligibility criteria.Can I get an interest only mortgage using Help to Buy?
Help to Buy is only available on capital repayment mortgages.Can I buy a property using Help to Buy and rent it out?
Help to Buy will only be available on properties which are occupied by the individual or individuals taking out the mortgage.How do I go about accessing these schemes?
Help to Buy: equity loan will be available from 1 April 2013. Buyers will be able to access this through participating housebuilders and HomeBuy agents.Help to Buy: mortgage guarantee will be available from January 2014. The Government will provide further details about the scheme later in the year.