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Archive for April 2016

Gaia Herbs Mental Alertness, 60 Liquid Phyto-Capsules

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Daily Wellness Mental Alertness supports mental clarity, focus & memory. Lack of focus and distractibility can make everyday activities a struggle. Mental Alertness helps enhance the cognitive functions of the brain with concentrated herbal extracts that support memory, concentration, and clear thought. The inclusion of plant-based antioxidants additionally helps protect the integrity of vessels that deliver blood to the brain.
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Written by gilliamtessa12

April 19, 2016 at 9:57 am

The Iron Floor Under UK Property Prices – And When You Should Invest Again

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The price of property is what someone is willing to pay for it. Or so the saying goes.But what determines the price that someone will pay?Well, until recently this was limited not by a capacity to pay – but by a willingness to chase up prices. So, it was demand driven – rather than controlled by a capacity to afford. Since last August the environment has changed utterly.The steady withdrawal of mortgages offers and the increase in the headline rates has been accompanied by a reduction in the Loan to Value from 125% to less than 90% for home buyers and now down to 75% for new-build investments.By standard economics – ie the balance of supply and demand – the collapse in the demand for houses, as shown by the ability to sell new homes (70% reduction reported by Bovis recently) should mean a collapse in house prices.Residential property doesn’t work like this.So, the point is that whilst new buyer demand for new homes may have collapsed, the general demand for homes or places to live is stable – because everyone is still living in a home, whether they rent it or buy it.Now, the big question is how will the developers react?Well, the first signs of this are good for property investors but pretty awful for the construction industry.Persimmon – UK’s biggest home builder – has led the way. They have stated that they will close all new sites. This means that they will build their existing projects more slowly, but they will not begin any new projects.The effect of this is to suck supply out of the market.Persimmon did have an alternative strategy – and they have rejected it. That strategy would have been to continue building as normal – with a slight reduction, perhaps – and try to sell their way through the construction recession.This is the approach taken by many developers in the early 90’s and it resulted in many going bust.I think Persimmon have made a smart move and are planning on a 2 to 3 year slump in construction.I also believe – but have no hard evidence – that this is a result of developers thin margins. In other words, the cost of construction has been rising rapidly as steel and raw materials shoot up in price. Add to this higher labour and health and safety costs, plus new government legislation on efficient houses which is in the pipeline and you can see that builders are on a hiding to nothing.If the big house builders had continued to construct as before and offered price cuts or added incentives they simply would have put themselves out of business.Now, this clearly means a very tough time lies ahead for the construction industry and there will be knock-on effects on the wider UK economy (ie fewer Polish builders renting property in the UK).However, the effect of this is to re-build demand for a price spurt in the years to come.Students of the Kate Barker report (which effectively set this target) will recall that the setting of the target (at 240,000) was designed to bring UK house price inflation back in line with normal European growth rates.Therefore, if there is a short fall against this target, then the long term price growth of UK property will be above European averages.And the more the achieved numbers fall short of the target, the higher UK price growth will be.Now, we must of course factor in an element of reduction in the house price target to reflect the fact that the economic (and therefore population via migration) growth of the UK will be more subdued.It is fair to say that the actual houses built vs those target is so far short that this will put an iron floor under UK property prices.Now, don’t read this the wrong way. In the next 3 years UK house prices will grow by an average of zero%.Adjust this for inflation of around 4% and your money will be worth 13% less in 3 years than it is now. Maybe 4% is a little high and you prefer a 3% forecast – either way, the result is negative growth.Equally, buy something now at a 15% ‘distressed’ price and your money will just about keep pace with inflation over the next three years.However, UK property will, when it finally emerges, see a sudden jump and a strong demand and an industry that isn’t able to match this demand with supply.This means that those smart house builders who have built up cash reserves and land but shed the construction worker jobs, will then start re-hiring and be in a strong position to benefit from a UK property upswing – starting around 2011.Until then, UK property is a strong hold – because there is an iron floor underneath UK property prices this will ensure they do not crash or collapse.My UK price forecast for 2008 remains in the -2.5% to -5% range and will be driven largely by constructors attempting to unwind positions and reduce supply.However, I expect this to take place in a controlled fashion and hence any softening in prices will be modest.Also, this size of price drop is not enough to make it worth selling a property (if you currently hold it) now and then re-buying in a few years time.So, what is the best strategy as I see it?Let’s look at what I forecast over the next three years. Here’s how I see it breaking down:
Year one: -5%
Year two: +2%
Year three: +3%
Net over three years = 0
So I would say, forget this year – and start looking for excellent deals next year and expect total growth over the following two years of around 5%.What will be crucial, though, is to achieve a genuine discount on market value of at least 15% to ensure real growth, net of inflation. Put yourself in this position and follow this timing and I believe you will be well placed to feel the benefits of the inevitable fast pick up in the UK market when it arrives.That is why UK property is a strong hold – but not a place to put new cash for at least one more year.

Written by gilliamtessa12

April 9, 2016 at 6:11 pm