The Worst Is Yet To Come....

It could be argued, the best indicator of the future house prices can be found on the Derivatives Trading market, where professional investors bet on the future of house prices......

The World of Finance and in particular Trading has been described as ´Advanced Gambling´ and the market for betting on where UK property values are going is a healthy one with hundreds of £millions being wagered.

Currently, the Derivatives Market is trading contracts on a 30% fall in UK property values over the next 2 years. Suggesting a ´Peak to Trough´ fall of between 45 - 50%!

Possibly even more gloomy are the long term figures with 10 year contracts showing Zero growth and 19 year contracts offering only 35% increase. Which is exceptionally conservative given the length of time, which should involve a full global economic cycle.

However, this should be looked at with some caution. Given that many Banks have been burned over the past year or so, it could simply be a case of ´Hedging´ their expose to property markets which would inevitably force heavy betting on ´Worst case scenarios´.

However, whether they be right or wrong, the outlook doesn´t appear very promising?

Comments welcome: info@oyster-international.com

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