The UK Property Boom – they will continue in 2007

In an article published in December: "This is money", she conducted a survey in which 55% of people expect prices to rise in 2007, and that they are expected to increase to 6% or more.

This was expected from the previous year at 43% of respondents said prices are rising.

In addition, the Halifax has said that UK house prices have risen an average of 10.6% over the last ten years. Nationwide quote that the average house price now £ 168,500. This is 6 times the averageWages, while in 1989 the average house price was £ 62,800 which was 4.8 times the average wage.

The Economist reviewed this subject in 2005 and found that increased between 2000 and 2005 (in developed promote economies) the total value of residential property to $ 30 trillion U.S. dollars to 70 trillion!

In other words, the increase is equal to 100% of the total GDP of these countries.

This is bigger than the stock market boom of the late 90s, where an increase of more than 5 years80% of GDP.

So this is a big bursting bubble? What can we as contibuting factors, identify the capital gains at this amazing?

Well, if we look at the UK there are several factors that have contributed to some of which are:

– Lower interest rates

– Lack of confidence in equities in 2000

– The easy availability of credit finance and mortgage

– The popularity of buy to let

– People who are for interest only loans, so that the monthlyPayment less

– Lack of supply

Nobody has a crystal ball with any kind of investment, but if we look at the history of a healthy real estate prices displayed in value above inflation (though those of us who would have been around for a while, always point out the cyclical nature of the investment — Remember that house prices drop in 1989
and in the early 90s?)

"Let the buyer beware" is always in quotation marks when you buy a house. What we recommend is certainly, if oneinvest on the property as an asset class that is here to limit your risk on "reasonable" level on your overall attitude toward risk. These levels would typically 5-15% of your portfolio.

The Financial Tips Bottom Line:

If you can invest in real estate to buy other than going down the route, make sure that as an asset class is subject to part of a well-diversified risk portfolio.

Check the exposure you already have a property in your ISA, unit trusts andPensions and make sure you know what type of real estate funds invest in by the necessary research.