11/17/2011

UK seen as safe haven in Euro crisis

Currency brokers have noticed a surge in British and other international investors pulling their cash out of the troubled Euro zone. Much of these funds have been transferred to UK Banks and financial institutions. With its independent currency and coalition government pressing ahead with austerity measures, the country is seen as a better prospect that the uncertainty in mainland Europe.

 A Euro break could seriously undermine values of European property, on top of the falls that the recession has wrought on certain markets. Spanish property, for example, has fallen 24% since its peak in 2007 and it’s only the strength of the Euro that has lessened the effect on foreign investors, particularly those in the UK where the currency weakened against the Euro over recent years. Now Sterling is likely to continue its upward trend against the Euro.

With even UK banks linked to those on the continent, it is unlikely that UK Banks will escape unscathed from any collapse of the Euro. This is leading investors to consider the safety of property in the UK and also Germany, the one other country in the EU considered a safe haven.

P4P Comment

In recognition of the growing need for investment property in the UK, P4P has recently launched selected foreclosed property that is ideal for letting. We avoid bad areas and offer well under market value.

The UK properties don’t quite offer as much “brick for the buck” as our American foreclosures, but there are a 4 really important pluses to consider:

1. Population density in England is among the highest in the world and demand for rental accommodation is strongly on the up.

2. Finance can often be got on our UK property. We make sure the property is out of blighted areas and is usually the only foreclosed property on the street or in the apartment block. This is good for loan valuation. Interest rates are low.

3. Rent insurance can usually be purchased, for modest cost, on our UK foreclosures. This ensures that rent will always be paid and all legal costs covered in event of dispute or claim. 

4. The UK property market has not seen anything like the wave of foreclosures that America has. In fact, in certain areas property has been going up in value for the past few years, hardly affected by the recession.