Property Prices are Falling Here is a Simple Solution


by Sacha Tarkovsky - Date: 2007-03-05 - Word Count: 383 Share This!

The property market after many years of good growth is starting to slow and with the stock market falling home owners are starting to worry that house prices could nose dive to.

However there is a simple way to protect yourself from these falls and its becoming more popular than ever.

The Outlook

The property boom is over for the time being for the following simple reasons:

Liquidity in the economy is being curtailed by higher interest rates.

This makes both exiting and new mortgages cost more and less people can afford new housing or to move.

Even if rates were not to rise any further the above still applies to a lot of homeowners:

There are a huge percentage of mortgages that were sold with low starter rates which have now increased and this is equivalent to a rate rise to these people.

After a boom a best normally follows and that is what we are likely to see.

If the stock market continues to fall then liquidity will be squeezed even further and less money means less wealth and housing prices will suffer even more.

A simple solution

There are schemes that will allow you to lock in the value of your house at current rates for a small premium.

If house prices fall then you can get the value you locked in your property at and you are protected against a plunging property market.

If house prices rise, you are unaffected and can take advantage of the full gain in prices.

So you protect yourself from falls and can take advantage of any rises which gives peace of mind.

In a raging bull market these companies don't do much business, but in a falling market business is booming and it is perhaps something that any homeowner should consider.

The amount paid for the protection offered is affordable and gives peace of mind and is applicable to the majority of home owners.

Not only is this significant for home owners it also cuts the risk of people investing in property and can be used on commercial property as well.

History repeats itself

The housing boom has been great, prices have risen strongly and economic conditions now point to lower prices.

Locking in property values against price falls looks set to become more popular than ever.


Related Tags: outlook, property values, property prices, real estate value, interest rates property

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