© PhillipC


Property rental in London is becoming a hot industry - for just about everyone.

Renting a house in London is becoming a more common choice because it provides some financial flexibility in the current economic setting (the UK is one of the few countries where the Recession still has a grip). The cost of buying a house together with the tight credit market means that first time home buyers face some serious barriers to purchasing a home. Many see renting as their only choice.

The difficulties faced by would-be first-time home buyers is only part of the picture. Many investors in the UK are fed up with the stock market and see real estate as a safe alternative. There's been about a 40% increase in demand for investment property in the half million pound price range in the second half of the year. Buying-to-rent is a new investment trend. Existing property firms want to increase the size of their portfolios. At the same time, new investor-landlords are entering the field.

Add to this the fact that managing a property portfolio has become simpler in the last decade. The insurance picture has improved for landlords. The Internet had made advertising easy. And demand has grown.

That demand is going to continue to grow. And the Recession may mean that renting becomes a more palatable option - even once Recovery takes hold.

Note: Because Visastreet is a well known company, we felt no reservations about writing this post.

The news on housing foreclosures isn't getting any better. In fact, it's getting worse.

According to a story in the Wall Street Journal, one in every eight U.S. households with mortgages was either in foreclosure or behind on its mortgage payments in the second quarter of this year.

The most frightening thing about these new numbers is that many of these foreclosures on on households with good credit that took out safe, conservative mortgage loans.

The national economy, of course, is the culprit here. Too many people have lost their jobs during this economic slump. And they're not able to find new ones. Suddenly, a mortgage payment that was doable during good times is an impossibility.

The bottom line, unfortunately, is that the foreclosure crisis won't ease until the nation's unemployment rate starts seriously dropping. Homes became far too expensive during the recent housing boom. This means that mortgage loans, and the monthly payments that come with them, took up a greater percentage of homeowners' monthly income.

We are now seeing the results: When the economy is sailing along, and jobs are plentiful, homeowners can make their mortgage payments. When a bump occurs, though, and jobs start disappearing? Those mortgage payments are far out of reach for too many homeowners.

Did you see the housing crash coming? There were certainly enough warning signs. Maybe the better question is this: Did you see the housing crash coming and did you do something about it?

In other words, in early 2006 when housing prices were reaching their peak, did you sell your home for a big profit and then rent an apartment, where you could wait out the housing crash?

Not a lot of people did this. It's not easy to sell a house, even if you are looking at big profits. And for many homeowners — those who planned on living in their homes for a long time — there was no reason to sell to avoid the housing crash.

Bu the Los Angeles Times ran a good story recently on people who timed the housing crash perfectly and did sell their homes right before they would have started losing their value. The Times story highlights the case of homeowners who sold their residence in Newport Beach, Calif., in 2006 for 20 percent more than what they paid for it. They then rented an apartment that is one-fifth the size of their home.

The story doesn't end there, though. This same couple is now trying to decide when the best time will be to purchase another home. In other words, they're wondering if residential real estate has already hit bottom. Will housing prices get even cheaper, or is now the time to buy?

Doing this, of course, can make you crazy. It's tough to time the residential real estate market perfectly. No one knows for sure if the modest housing price gains we've seen recently across the country will hold. After all, we've just gone through the spring and most of the summer. Housing sales activity is usually stronger in these warmer months. As the temperatures cool, we may see both housing sales and prices drop again.

If you're hanging on the sidelines trying to determine the best time to buy a home, spare yourself some agony: The best, safest way to make money by buying a home is to commit to purchasing a residence in which you'll be comfortable spending at least seven years. That way, when it's time to sell, the odds are terrific that your home will have appreciated in value enough for you to make a nice profit.

Don't try to buy a home in the hopes of selling it in just two or three years for big money. That kind of housing market, it seems, is long gone.

We all know what the traditional American dream is supposed to be: Owning a home. But that dream hasn't worked out so well for a lot of people these days. It's caused a lot of folks to wonder if that American dream shouldn't be changed a bit. Maybe it's better to rent.

The Wall Street Journal recently ran an interesting story about the fear and anxiety that a home can cause when its owners are struggling to make their mortgage payments. The threat of foreclosure is a terrifying one. It's certainly no American dream.

I've long argued that renting actually makes better sense for many people. During the housing boom, though, everyone wanted to own a house. People viewed homes as quick money-makers. Of course, we've since learned what a fallacy that notion is.

A lot of people have since learned that it's nice not to have a huge mortgage payment due every month. Sure, you'll have to make those monthly rent payments, and they can be high, too. But you won't have to worry about maintenance. Those costs — try calling a plumber on a Saturday night — can be unexpectedly high, even in a newer home.

I often tell my wife that I was born to be a renter. I hate doing repair work, and I barely tolerate mowing the front lawn. I dream of living in an apartment. When the kitchen sink won't drain, I'd be able to call our landlord and let the landlord deal with the problem.

Alas, I'm in a house. It's nice for our kids. Not so nice for me, or my wallet.

So think long and hard before you decide to purchase your first home. You may discover that renting isn't all that bad.

Remember when the number of housing foreclosures first started to boom? We liked to say it was because of all those greedy homeowners who took out high-risk subprime mortgages to get into homes they couldn't really afford.

Well, today's foreclosure victim is likely to be solidly middle class, and someone who's never had trouble making mortgage payments in the past.

I knew this because I cover the real estate and mortgage industries for several newspapers and magazines. But I also heard it on National Public Radio this afternoon. It was an excellent story, one that profiled the bad fortunes of the owner of a small restaurant.

For about 13 years, this restaurant owner had diligently made his monthly mortgage payments. Then the economy went sour. People stopped eating out, and the restaurant owner's business plummeted. He began taking home about $1,000 less every month. At the same time, his wife, a registered nurse, suffered a back injury. She know has to work fewer hours.

This combination means that the couple is struggling mightily to pay their mortgage on time. They're hoping to get a loan modification from their mortgage lender. But so far — like many other struggling homeowners — they've had little luck getting their mortgage lender to respond.

I appreciated this story because it paints a different picture of foreclosure. We often hear critics railing on about how the government is helping greedy or lazy homeowners save their homes, while hard-working, tax-paying citizens get nothing.

Well, this isn't really true. Many middle-class, hard-working people stand to benefit from mortgage loan modifications, if the Obama administration's loan-modification program ever actually begins to achieve its goals.

Take a close look at your own finances. What if your work hours were cut in half? What if your job disappeared? Would you be able to make your mortgage payments?