News Review - Week ending 11th January 2009

Happy New Year and welcome back to our Free Weekly News Update!

Firstly, may we wish you all a very happy 2009. Last year was a veritable tale of mixed fortunes: some were to see the credit crunch as a playground of opportunity while others were badly stung by fast-moving events and couldn't wait to see the back of it. At Complete Property Investment we want to start 2009 by keeping you informed of the latest interesting news feeds and on the business side increase massively the number of exceptional investment opportunities this year for our investors - meeting the demand whilst maintaining our trademark strong returns on investment and personal approach to customer service. So watch this space for new upcoming deals!

Let us start the year with some good news for Europe's commercial property sector - The Guardian reporting a Reuters newsfeed says that the commercial property markets in Europe will see a significant upsurge in investment as rentals increased in Q4 2008 .

If the commercial property sector had been excessively down-valued then could the same be true for the equally bad hit residential sector? With reports of rental prices decreasing across the board this could be wishful thinking and a false comparison.

From one upbeat article to another - Scotland's Herald newspaper hails the news that Scottish house prices bucked the national trend and showed a surprising 0.1% increase..

Ok, it is also true that prices north of the border fell by 8.1% last year, but according to the article this was less than anywhere else in the United Kingdom and the recent rise could be significant in that it indicates a reversal in the slump.

However, some dispute these figures from Nationwide. The fact that in Scotland it takes several months to conclude a property purchase, there are those who say the figures are misleading.

Taking a look now to the high end UK property market, this piece posted on the Property Wire paints a mixed picture but points to experts in the industry who believe that confidence and demand is healthier the higher up the market you go.

The reasons for this are put down to people moving out to the suburbs from the capital (where prices have remained strong), new wealth created by buoyant industries such as the energy sector and finally due to wealthy foreigners. The last reason has some credence with me in light of the fact that UK property is very much more attractive due to price drops but also due to the collapse in Sterling's value.

Last week we covered the reasons why most lenders were being slow to pass on the falls in Base Rate and LIBOR to customers. Yesterday we saw the Bank of England drop rates by 50 basis points to 1.5% - The lowest since the creation of the Bank Of England in the 17th century. This article just posted by the Telegraph Online gives the first reactions to the news from business and industry figures. Francis Salway, chief executive of Land Securities and the president of the British Property Association believes that we will see a repeat of the 90's crash where people came back to the property market as yields on savings dropped.

Amongst the quotes gathered in this article seems to be an underlying consensus that interest rates will drop further with some predicting it to hit 0%. If this were to happen then it effectively takes away the Bank of England's main tool to stabilise and stimulate economic recovery.

In the dying days of 2008 Peter Schiff, President of Euro Pacific Capital, wrote an article in the Wall Street Journal cricising political interference at national governmental level in the recession.

He makes the case that economic laws apply to everyone, including governments. He firmly believes that economic recessions happen to correct an economy and that trying to soften the economic reality merely makes things worse.

"When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing".

Whether we are experiencing a normal economic correction or an event that must be managed in anyway possible, you can count on 2009 being as unpredictable as last year. We will continue to keep our investors informed of the best opinions the industry has to offer through this press review.

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