London, UK (PRWEB) August 15, 2007
News of failing pensions, UK real estate, and property funds research shows that overseas property investment is providing investors with the strong returns.
Fears of an impending pension crisis in the UK have followed on from investment news reports that many older people have not started saving towards retirement. According to figures published by Edward Jones 30% of those aged 45 to 54 and 12% of those over 55 have not yet begun saving for retirement. But nearly 46% of 25 to 34-year-olds and 57% for those aged 35 to 44 have already started saving. Andrew James, a retirement planning manager, said 'The most worrying aspect is the high proportion of middle aged people who have made no provision for their retirement. They are the very category who will find it most difficult to make adequate provision simply because time is running out.'
Inflated house prices with some financiers believing a crash in the housing market, property investment in the UK is becoming a growing concern. A huge number of first time buyers are now taking out 100%-125% loans to meet these costs and landing immediately into the negative equity trap. According to Abbey National the average loan has doubled in last 4 years and statistics show over 6% of homeowners are struggling to meet these payments. In a report by the online mortgage company, MForm, 2 million homeowners are having payment problems and analysts are warning of a slowdown in the market which could indeed make things worse in terms of negative equity.
Money coming out of the REITS has doubled since the first half of the year with investors fearing a collapse in this market. Statistics from the Association of Real Estate Funds show redemptions have increased from £324m to £641m. Within the past few years investors have placed huge amounts of investment into these funds and have previously received good returns. However, amidst fears of a failing market, a decrease in confidence and changes to the pricing policies, investors' holdings have been reduced considerably.
Moneycorp, the foreign exchange service, have reported that investors can benefit greatly from foreign currency mortgages and confirmed the popularity since the interest rate rise in the UK. These products allow borrowers to take advantage of the low interest rates when purchasing real estate abroad.
Property research from Baydonhill has also shown that 50% of independent financial advisers believe that the overseas property investment provides stronger returns with over 30% of IFA's experiencing an increase in the sector within the last year. IFA's also predict that this figure is likely to increase within the next few years as unaffordable prices in the UK prompt investors to look elsewhere. First time buyers are investing in overseas property to get on the first rung of the UK property ladder and an increasing number of those approaching retirement are using this type of investment to fill a pension short fall.
The emerging property market is seeing the best returns and with good advice from experienced brokers, investments can provide very lucrative results.
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