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The Benefits of long-term property investment in the UK

Long-term property investment in the UK can offer several benefits for investors. Here are some of the advantages: 1. **Steady Income**: Rental income from investment properties can provide a steady stream of cash flow, which can be particularly attractive for retirees or those looking to supplement their income. 2. **Appreciation**: Historically, property values in the UK have tended to appreciate over the long term. While there can be short-term fluctuations, holding onto a property for many years can result in significant capital gains. 3. **Portfolio Diversification**: Real estate can be a valuable addition to a diversified investment portfolio. It often behaves differently from other asset classes, like stocks and bonds, which can help spread risk. 4. **Tax Benefits**: In the UK, there are several tax advantages to property investment. For example, you can deduct certain expenses from rental income, and there are various tax relief schemes for landlords. 5. **Inflation Hedge**: Real estate can serve as a hedge against inflation. As the cost-of-living increases, rental income and property values often rise, helping to preserve the real value of your investment. 6. **Control**: Property investment gives you a degree of control over your asset. You can make decisions about property management, renovations, and when to buy or sell, which isn’t always the case with other investments like stocks. 7. **Retirement Planning**: Many people use property investment as a means of building wealth for retirement. Owning income-producing properties can provide financial security in retirement. 8. **Passive Income**: Once a property is set up, it can generate passive income without requiring constant attention, making it suitable for individuals with other full-time commitments. 9. **Demand for Rental Properties**: In some areas of the UK, there is a strong demand for rental properties due to factors like urbanization, job opportunities, and a shortage of affordable housing. This can translate into a stable tenant pool. 10. **Long-term Stability**: While there can be short-term fluctuations in the property market, real estate tends to be less volatile than stocks, making it a stable and predictable long-term investment. It’s important to note that property investment also comes with risks and challenges, including property management, market fluctuations, and liquidity issues. Moreover, the performance of any investment can vary greatly depending on location, property type, and individual circumstances. Therefore, it’s essential to conduct thorough research, consider your investment goals, and seek professional advice before embarking on a long-term property investment strategy. Here at Global investments, we have property experts on hand who can guide you through the different options, helping you achieve your long terms goals. Please contact us to arrange a call.

Why Buy Investment Property in England

Investing in property in England can be an attractive option for various reasons, but it’s essential to consider your goals, financial situation, and market conditions carefully before making any investment decisions. So why do people choose to buy investment properties in England? One of the primary reasons to invest in property is to generate rental income. England has a strong rental market, and demand for rental properties remains relatively stable. This can provide a steady stream of income to investors, which can be particularly attractive in times of economic uncertainty. Over the long term, property values in England have generally appreciated. While there can be fluctuations in the property market, investing in a well-chosen location can result in substantial capital gains over time. Property can be a valuable addition to a diversified investment portfolio. It can provide diversification benefits because it doesn’t always move in tandem with other asset classes, such as stocks and bonds. This can help spread risk. There are various tax benefits associated with property investment in England, including potential deductions for mortgage interest, property maintenance expenses, and depreciation. Be sure to consult with a tax professional to understand the specific tax advantages available to you. Some investors purchase investment properties with the goal of building wealth for retirement. Rental income can provide a reliable source of retirement income, and the property itself can be sold to fund retirement or passed down to heirs. Real estate is often considered a hedge against inflation because property values and rental income tend to rise with the overall cost of living. This can help protect your investment’s purchasing power over time. Property investors have more control over their investments compared to some other asset classes. You can make decisions about property management, maintenance, and when to buy or sell based on your individual goals and market conditions. England, particularly in and around continues to experience a demand for housing. Population growth, urbanisation, and immigration contribute to this demand, making it a potentially lucrative market for property investors. England has a well-established legal framework for property ownership and rental agreements, which can provide a level of security and predictability for investors. However, property investment also comes with risks and challenges, including market fluctuations, property management responsibilities, financing costs, and the potential for vacancies. It’s crucial to conduct thorough research, assess your financial situation, and seek advice from professionals, such as real estate agents, financial advisors, and lawyers, before making any investment decisions. Additionally, consider your investment horizon and whether property aligns with your long-term financial goals. Here at Global Investments, we have a range of options for the overseas property investor. The majority of the properties we offer are Freehold and come with guaranteed net rental incomes up to 9% for as long as ten years. Please contact us and speak with one of our property investment experts.

Can UK Councils Home the Homeless alone, could Housing Associations fill the gap ?

The effectiveness of UK councils in housing homeless individuals can vary widely depending on several factors, including local policies, funding availability, resources, and the specific approach taken by each council. While some councils may excel in providing support and housing options for homeless individuals, others might face challenges that hinder their ability to effectively address homelessness. The UK government has made efforts to address homelessness through various initiatives, such as the Homelessness Reduction Act 2017, which places more emphasis on prevention and support for those at risk of becoming homeless. Additionally, there have been programs aimed at providing temporary accommodation and support services for homeless individuals. However, there have been reports of overcrowded and inadequate temporary accommodations, long waiting lists for social housing, and budget constraints that impact the ability of some councils to effectively house homeless individuals. Moreover, the causes of homelessness are complex and often interconnected, including issues like poverty, mental health, addiction, and lack of affordable housing, which can make it challenging for councils to address the root causes of homelessness. It’s important to note that the situation can change over time and from one location to another within the UK. Some councils may have more successful programs and resources dedicated to tackling homelessness, while others may struggle due to various reasons. Public opinion on how well councils are doing in addressing homelessness can also vary based on individual experiences and perspectives. If you’re interested in the status of how UK councils are handling homelessness, I recommend looking up recent reports, studies, and news articles that provide insights into specific council efforts and outcomes related to homelessness in different regions of the UK. Housing associations can play a significant role in addressing the housing crisis in the UK, but they are one part of a broader solution that requires collaboration between various stakeholders, including governments, local authorities, private developers, and social organizations. Housing associations are non-profit organizations that provide affordable housing and support services to a wide range of people, including those on lower incomes, key workers, and vulnerable populations. There are some ways in which housing associations can contribute to solving the housing crisis. Housing associations often focus on building and managing affordable housing units that cater to individuals and families who might not be able to afford market-rate housing. By offering affordable options, they help address the gap between housing demand and supply. Many housing associations provide social housing, which is rented housing typically provided by the government or non-profit organizations to those in need. This type of housing helps support individuals and families with lower incomes. Housing associations can develop mixed-income housing projects that include a combination of market-rate, affordable, and social housing units. This approach promotes social integration and reduces the concentration of poverty. Housing associations often offer additional support services to residents, such as employment assistance, education and training programs, and community-building initiatives. These services can help residents improve their overall quality of life and work towards long-term stability. Housing associations can be at the forefront of innovative housing design and sustainable building practices, helping to create housing that is not only affordable but also environmentally friendly and energy efficient. Collaborating with local governments, private developers, and community organizations allows housing associations to pool resources, share expertise, and create comprehensive solutions that address various aspects of the housing crisis. Housing associations can work on preventing homelessness by providing transitional housing and support for individuals at risk of becoming homeless. While housing associations have a role to play, it’s important to note that the housing crisis is a complex issue with multiple underlying causes, including housing supply shortages, affordability challenges, economic disparities, and more. Addressing the crisis requires a multi-faceted approach that involves policy changes, increased funding, land use reforms, and coordinated efforts among various stakeholders. Ultimately, housing associations can contribute significantly to alleviating the housing crisis in the UK, but their impact will be most effective when combined with broader systemic changes and strategic partnerships across the housing sector. Here at Global we and our partners work with Housing associations who take tenancies in our investors properties providing a long term net income with no voids to the investors and homes for those who maybe homeless without this opportunity.

Can I maximize my property investment returns renting to a housing association?

Getting better returns from a housing association tenant in the UK can depend on various factors, including the location of the property, the terms of the tenancy agreement, and the demand for rental properties in that area. Here are some considerations to keep in mind: The location of the property is a crucial factor in determining rental returns. Properties in high-demand areas, such as city centres or areas with good transport links, tend to have better rental yields. Research the local rental market to understand the demand and rental rates in the specific area where your housing association property is located. The condition of the property can significantly impact its rental potential. Ensure that the property is well-maintained, clean, and in good repair. A well-presented property is more likely to attract tenants and command higher rents. Depending on your budget, consider making value-add improvements to the property. These could include upgrading the kitchen or bathroom, enhancing the curb appeal, or adding features that tenants might find attractive. However, be cautious not to overspend on improvements that won’t yield a significant increase in rent. Analyse the demand for rental properties in your area. If there is a shortage of rental housing and a high demand for housing association properties, you might have the opportunity to command higher rents. Conduct thorough market research to understand the rental rates for similar properties in the area. This will help you set a competitive rental price that offers good value to tenants while maximizing your returns. Consider whether you will manage the property yourself or hire a property management company. While managing the property yourself might save money, a professional property manager can handle tasks such as tenant communication, maintenance, and rent collection, potentially reducing the stress and time investment on your part. Choosing reliable and responsible tenants is essential to ensure consistent rental income and to minimize the risk of property damage. Proper tenant screening can help you avoid potential problems in the future. Make sure you understand the legal obligations and responsibilities that come with renting out a property, including adhering to the terms of the housing association agreement and complying with relevant landlord-tenant laws. Consider your long-term goals for the property. Are you looking for short-term rental income, or do you plan to hold onto the property for capital appreciation over time? Your strategy might influence how you approach rent pricing and property management. Global investments specialise, with their partners, in the sourcing and selling of housing association stock that comes with upon completion of the transaction a tenant in place for 10years with an increasing rent and a full repairing and insuring lease. We have sold many properties of this type and can help in the right selection to fit your budget and circumstances. It’s important to note that the relationship with a housing association might come with certain restrictions and guidelines that could impact your ability to set rents or make certain changes to the property. Always consult with legal and financial professionals before making any decisions that could affect your returns or the terms of the housing association agreement. Contact us to speak with one of our experts.

There is a shortage of Social Housing in the UK currently

Shelter makes the point on their website (https://england.shelter.org.uk/) that the Social Housing (Regulation) Act is now law – but the government must do more. After years of demanding positive change to protect tenants, this legislation is a huge step forward. But stronger regulation alone isn’t enough. Investment in more social housing is desperately needed to help over a million households stuck on social housing waiting lists and the 100,000 households who are homeless right now, they say. The following is an extract from their proposals. There is a social housing deficit. More people than ever are struggling to afford a secure place to live. Yet, not enough social homes are being built. Over 1 million households are waiting for social homes. Last year, 29,000 social homes were sold or demolished, and less than 7,000 were built. In England, there are now 1.4 million fewer households in social housing than there were in 1980. As a result, millions of households have been pushed into the private rented sector, which has more than doubled in this time. Their facts and figures explain the issue. There are not enough homes in the UK. They state that a home is a fundamental human need. But right now, there are simply not enough good quality, low-cost homes available for everyone who needs one. Social housing on the decline. Social housebuilding in England is at its lowest rate in decades. Since 1991, there has been an average annual net loss of 24,000 social homes. Fewer social homes are built, compared to those lost through sales and demolitions. The result is a deficit in social housing. home cost 8 x average salary. There are many unaffordable homes. The housing emergency is affecting many people across the country. Priced out of owning a home and denied social housing, people are forced to take what they can afford. Even if it’s damp, cramped, or away from jobs and support networks. Social housing has declined as fewer homes have been built in England since 1923 Private housebuilding and social housing delivery peaked in England in the 1930s and again in the 1950s through to the 1970s, with house prices climbing gradually. Since the 1980s, construction of social housing and private homes has severely declined, with steep increases in house prices from the mid-1990s onwards. Housebuilding has almost halved in 50 years. In the 1960s, 3 million homes were built in England. Since 2010 the UK has built just 1.3 million homes. This is one reason why house prices are so high. And the UK relies on the private sector to build houses. And the goal of the private sector is to make a profit. When fewer people can afford to buy their own home, it affects the number of homes developers sell. And as a result, developers build fewer homes. Since 1990, as part of their developments, developers must contribute about a quarter of new builds as Affordable Housing (AH). So, when private developers don’t build houses, that means we’re losing out on social housing too. So, what is ‘affordable housing’? The government’s definition of Affordable Housing (AH) is housing for sale or rent for those whose needs are not met by the market. This includes housing that provides a subsidised route to home ownership and/or is for essential local workers. This definition complies with one or more of the following definitions, social rented housing – low rent and secure housing which is prioritised by need. Affordable rent – this is higher rent (80% of the market rate). It is less secure housing, prioritised by need. Subsidised home ownership. Starter homes. Discounted market sale housing. Shared ownership – housing where you buy part of a home and pay part rent. Since 2000, successive governments have known that too few homes are being built and set a target of 250,000 new homes annually. Each year this target is missed. UK is now short of around 1.5 million homes. The reliance on developer contributions to deliver affordable homes means that when fewer houses are built, social housing levels fall. Since the 1980s, the UK has seen private developers build less. Worse still, the government has abandoned social housing delivery to the private market, hoping profit-seeking developers will build social housing as part of their planning permission. Today, the government provides very little direct funding for social housing. That strategy has obviously failed and is the main reason why there’s such a social housing deficit. The percentage of renters in overcrowded homes has steadily increased since 1995. Since 2000, the percentage of renters in overcrowded homes increased from 4.5 to 7.6. People become overcrowded when there is not enough affordable housing available, or when housing costs are high. On top of this, many families up and down the country are forced to settle for temporary homes. People ending up in temporary accommodation (TA) has more than doubled in the past decade, It last hit this level in 2007, just before the financial crisis. This is when housing costs rocketed, even though the waiting list for social housing has flattened since 2012, the number of families in TA is back up. Since 2012, the waiting list for social housing in England seemed to flatten. However, it’s important to note this isn’t because desperate families were placed in social housing. The reason goes back to 2011 when councils purged their waiting lists due to a massive shortage of social homes. In 2011, councils were given more flexibility in how they managed their waiting lists. This included limiting lists to people who lived locally for a certain length of time. Many councils introduced new criteria to help manage how they provided social homes. If families didn’t meet these criteria, they were removed from council waiting lists. The impact is clear. Since 2012, more people have been forced into temporary accommodation because there are simply not enough social homes available. While need for social homes is up, the number built is falling. And while the government has spent money on so-called ‘affordable’ housing – homes that aren’t affordable

Why invest in a UK property with a housing association tenant

Investing in a property with a housing association tenant can offer several positive advantages, which may make it an attractive option for certain investors. Here are some of the key benefits: Stable Rental Income Housing association tenants are generally reliable payers, and their rent is often guaranteed by the housing association or local authority. This stable rental income can provide you with a predictable cash flow and reduce the risk of rental arrears or void periods. Longer Tenancies Housing association tenants often sign longer-term tenancy agreements compared to private renters. Longer tenancies mean less turnover and reduced costs associated with finding new tenants and preparing the property for new occupants. Lower Vacancy Risk The demand for social housing is usually high, which means there is a consistent pool of potential tenants. As a result, the property is less likely to be vacant for extended periods, minimizing income gaps. Less Management Responsibility In many cases, the housing association takes on the responsibility of managing the property and dealing with tenant-related matters. This can be a significant advantage for landlords who prefer a more hands-off approach to property management. Social Impact Investing in social housing through housing associations allows you to contribute positively to society by providing affordable housing to those in need. Some investors find this aspect rewarding as they can make a difference in their community. Lower Tenant Turnover Costs With longer and more stable tenancies, you can save money on advertising for new tenants, tenant background checks, and property maintenance between tenancies. Government Support and Stability Social housing is often backed by government policies and initiatives, which can provide additional stability to your investment. Government support can also mean fewer policy changes that could negatively impact your rental income. Potential for Lower Property Prices Properties in areas with a high proportion of social housing may be more affordable compared to those in high-demand locations. This could make it easier for investors to enter the property market and diversify their portfolio. Hands-On Housing Associations Some housing associations actively maintain and improve their properties, which can result in better-maintained homes and potentially higher property values. It’s essential to note that the advantages of investing in housing association properties can vary depending on the specific location, housing association, and prevailing market conditions. As with any investment, there are also risks and considerations to consider, such as potential changes in government policies, the financial stability of the housing association, and the overall condition of the property. Conduct thorough research and seek professional advice before making any investment decisions. If you would like to know more about investing in Housing association tenanted properties and receive our current availability, please get in touch.

Detroit news July 2023

10 years after Detroit bankruptcy properties are seeing development again The Residence at Water Square A new skyscraper apartment building, renovated parking garages and a more walkable riverfront space are among the active projects on properties Detroit ceded to creditors in the settlement of the city’s bankruptcy. The city settled more than $1.4 billion in troubled pension debts with New York-based Financial Guaranty Insurance Co. (FGIC) and Bermuda bond insurer Syncora Guarantee Inc. The process resulted in FGIC gaining control of the redevelopment of the former Joe Louis Arena site on prime riverfront real estate, while Syncora also received development rights to riverfront properties and lucrative leases like for the Windsor-Detroit Tunnel. Local developers, however, have since brought the properties under their control. Now that they have, construction has risen, beautification and site preparation are underway and some sites have reopened to the public. The development at the Joe Louis (Arena) site may have taken longer than expected, but is a very beneficial outcome and looks like a positive outcome in the long-term. Joe Louis Arena site The city-funded demolition completed in 2020 of Joe Louis Arena, the home of the NHL’s Detroit Red Wings franchise until July 2017, when the team moved to Little Caesars Arena, is perhaps the most significant change to emerge from Detroit’s bankruptcy land deals. An affiliate of Detroit developer Sterling Group acquired option rights to the property from FGIC in a $14 million deal in 2019, buying the site of the former arena and its nearby parking garage. A hotel originally had been planned for the arena site, though a lawsuit from FGIC against the city in 2018 suggests those plans might have changed based on the city’s preferences as the downtown real estate market shifted. Sterling Group is now completing construction on a 25-story, 496-unit glassy apartment building it calls The Residence at Water Square, which features floor-to-ceiling windows and rooftop lounges that overlook downtown, the Detroit River and Windsor, Ontario. Applications for leasing the studio, one-bedroom and two-bedroom penthouse suites opened last month, with move-ins expected to begin in February, two years after site preparation work began. Danny Samson, Sterling Group’s chief development officer, likened the development to those seen in major real-estate markets like Chicago and New York, saying Detroit is now ready for an apartment complex like this one that can offer a walkable, upscale lifestyle. “It’s indicative of what is happening in the city of Detroit,” Samson said. “We have overcome challenging times and now are onto a brighter future with every opportunity today and for tomorrow.” The site itself has been dubbed Water Square, and there will be a walkable, interactive space around the building in future phases, Samson said, with more details to come. Sterling Group has been in talks with the Detroit Regional Convention Facility Authority board about building a 600- to 800-room hotel that would be connected to Huntington Place. The two entities entered an agreement in January, and property has been deeded to the city for the expansion, Bruce Goldman, the city’s chief assistant corporation counsel, said in an email. The riverfront convention centre sits within a short walking distance of the Residences at Water Square. Residents of the apartment complex won’t have their own parking, though valet service will be available. In early 2021, Grosse Pointe-based Foster Financial Co. purchased the eight-story Joe Louis Parking Garage at 900 W. Jefferson Ave. from Sterling Group to offer parking for tenants of the commercial building it owns at 211 W. Fort St. and for the public. “There is major demand in downtown Detroit, regardless of whether people are working from home,” said Brad Foster, president of Foster Financial. “There is a deficit of parking spaces.” The garage reopened in March 2022 after $10 million in renovations of the first five floors involving concrete work, waterproofing, new lighting and new security measures. Another $14 million in work is expected to be completed in the next year on the top three floors. Developments such as The Residence at Water Square ( just one example ) solidifies the increase and positive future for Detroit. Business, professional services, electronics, software and IT services and of course construction and real estate and financial services are showing great promise in the city. Global Investments are also seeing a growing re-interest in the Detroit buy to let investment market. If you are ready to invest in the Detroit housing market, or wish for a call and more information on the latest properties Global Investments can offer then please email us today at : invest@globalinvestmentsincorporated.

Cleveland News June 2023

‘Re-Imagine Euclid Ave.’ Study Focuses on Pedestrian Safety, Congestion on University Circle Corridor One of the most congested areas on Cleveland’s East Side could see a major road revamp in the next year, a recent study presented Tuesday foretold. “Re-Imagine Euclid Avenue,” a new transportation plan backed by NOACA and the RTA, suggests that the main artery linking Midtown to Uptown is in need of a restructuring, from dedicated bike lanes to an extension of RTA’s HealthLine further into East Cleveland. The Superior Avenue Midway, a centre lane bike corridor which will connect Public Square with East 55th, will be the city’s first modern cyclist corridor of its kind when its constructed—as planned—in 2025. And Shaker Heights’ $23 million Lee Road Action Plan, which was approved by council in March, will give the street its own road diet, adding a sidewalk-level, two-way cycle track, along with expanding sidewalks, seating and boosting lighting. University One, a recent high rise luxury apartment complex close to Euclid, along with the proposed Infinium on East 117th, Circle Square off Stokes Blvd., and a redesign of the nearby branch of the Cleveland Public Library, will only beckon for the fruits of the re-imagining: to enhance University Circle’s walkability. On and off its roadways. Cleveland City Council approves $10 million for waterfront projects Cleveland City Council just approved $10 million for four projects aiming to improve the city’s waterfront. The four projects — Irishtown Bend, expansion of an East Side fishing pier, Euclid Creek Greenway and the Northcoast Connector project — will receive funding through American Rescue Plan Act dollars. Legislation approving the four projects was approved without any no votes during a City Council meeting. The North Coast Connector project aims to connect downtown Cleveland to the lakefront by creating a land bridge from the downtown mall to the lakefront, improving access to the Rock and Roll Hall of Fame and Cleveland Browns Stadium. The $3 million approved would partially fund engineering of the project, which is estimated to cost between $8 million and $10 million, according to city documents. The city says its $3 million contribution is needed to leverage other investment in the project design. Council also approved $1.5 million for design work to improve and expand the East 55th fishing pier. When seeking public comment on how to improve the lakefront, one recurring theme was the need for an improved fishing area, Cleveland City Councilman Anthony Hairston said. The pier improvement is part of the CHEERS project. CHEERS, which stands for Cleveland Harbor Eastern Embayment Resilience Strategy, is a $300 million project designed to improve lakefront access east of the Burke Lakefront Airport. The project plans to do that by reusing dredge material from the Cuyahoga River to expand parks and improve the shoreline. Council approved spending $1.5 million in ARPA funds to design the project’s early implementation phase, which will include adding four to six acres of parkland, fixing a break wall and improving fishing areas, according to city documents. The Irishtown Bend project aims to stabilise a hillside in Ohio City and transform it into a 17-acre park. Cleveland City Council approved putting $5 million in ARPA funds toward the project, which has an estimated total cost of $95 million. The Euclid Creek Greenway would carve a two-mile trail from Euclid Creen Parkway to the lakefront. The multi-phase project is a “missing link” between the city’s East Side and the lakefront, said Joyce Pan Huang, Cleveland’s director of city planning. Council approved $500,000 toward the project which has a total cost of $800,000. The design and engineering phase is expected to go through 2024, as trail routes are not yet finalised If you would like more information or wish for a call regarding the latest properties Global Investments can offer in this location then please email us today at : invest@globalinvestmentsincorporated.

If I pay my fee and holding deposit am I committed to buy the house?

One of the most common questions by some of our investors are on the payments that are needed to reserve or book a property. To book and reserve a property and take the property off market are two payments, one payment of $3,900. This is our arrangement fee. And a $2,000 deposit which is sent to the title company in the relevant state. ( This is called an Ernest Money Deposit ) Even though these are not large payments clients see these as a commitments which they are. One of the questions that come up quite a lot is if the property inspection does not meet the clients expectations or there is something majorly wrong with the property then what happens with my downpayment and the fee paid to Global Investments. So let me cover this. Once a client pays the fee and the Ernest money to the Title company we sign a purchase contract. This purchase contract is subject to a full independent inspection. This is where we would check the main fundamental items in the property. Roof, foundation, electric, plumbing and also we check for any structural movement. If for whatever reason we don’t like something in the inspection we can simply cancel the sale and any funds paid are fully transferable to an alternative property of your choice. ( This its very rare as our suppliers give us excellent properties. ) Saying that normally like with any tenanted house the inspection can bring up minor maintenance items. Once we are happy that the house is in good standing and all the main items are fine we would ask the seller to take care of any maintenance items that are brought up by the inspection before we close. So even though you are making a financial commitment you are not committing to buy that specific house until we are 100% happy with the inspection. What you are committing to is buying a house in the US. We cover every aspect in the process and if there is something we do not like about the inspection then we would actually advise you to cancel the contract and we can start sourcing a more suitable property and like I said there is no cost to the client for this. These investments are long term 5-10 year projects so if it takes a few extra weeks to find the right house for you then this gives our clients the peace of mind that we have their best interests at heart. Mike Moodie – CEO Global Investments Inc

Housing supply has started to plunge in some US States.

We have wrote articles before about limited supply of properties in the US but now we can say supply is starting to plunge in some States. Mortgage rates are causing havoc in the US housing market, the 20 year high is splitting the market. According to realtor.com home inventory fell in 21 of the 51 cities. The divide seems to be between Northern and Southern States, property in the South tend to be more affordable where Buyers are more willing to enter the housing market which means there are more listings and more inventory available. In the North your will find larger Metropolitan areas, like New York, Chicago, Cleveland and Baltimore, the higher borrowing costs have stunted many prospective buyers causing local demand to fall. 85% of mortgage holders are locked in to sub-5% mortgage interest rates, which discourages current homeowners from selling their home and buying another at today’s elevated interest rates.The housing market has been the sector hardest hit by aggressive Federal Reserve interest rate hikes that are aimed at quelling high inflation by dampening demand in the economy. “Dampened affordability remains an issue for interested homebuyers and homeowners seem unwilling to lose their low rate and put their home on the market,” said Sam Khater, chief economist at Freddie Mac, in a press statement. “If this predicament continues to limit supply, it could open up an opportunity for builders to help address the country’s housing shortage.” Housing supply holding steady at near historic lows has propped up demand compared to other downturns, consequently sustaining higher home prices.“Inventory is approximately 46% below the historical average dating back to 1999,” says Jack Macdowell, chief investment officer and co-founder at Palisades Group. But going back to the South again the picture looks different, the Southeast market is incredibly active , which holds 18 of the 20 hottest housing markets, according to Bankrate’s Housing Heat Index. Research shows metro areas in Georgia, Tennessee, Florida and North Carolina are at the top of the list of the country’s strongest seller’s markets. Lawrence Yun, chief economist at the National Association of Realtors, sums up the Sun Belt boom this way: “It’s all about job growth and affordability.” In April 2023, Southeast home prices were up 2.5% compared to last year, selling for a median price of $405K. Miami was the most popular destination among Southeast homebuyers followed by Philadelphia and Boston. 71% of Southeast homebuyers searched to stay within the Southeast metropolitan area. The Wall Street ran article which sums up the situation very well, we are looking at A Tale of Two Housing Markets, one market stagnant with limited inventory while the other is booming with plenty of inventory, so is the South always sunnier ? It depends on your reasons for purchasing a property, if you are going to live in the property well then the South seems like the obvious answer, more inventory to choose from a selection of different areas. But if you are buying the property for an investment the North looks like the better option, limited inventory has pushed up rental demand which has pushed up monthly rental payments. The problem is getting the property in the first instance, in Cities like Cleveland and Detroit properties are being sold within a number of hours not just days. If you want to see our latest properties in Cleveland and Detroit, two of the best Northern cities please email invest@globalinvestmnets.com