The banking crisis will cause property prices to fall further, yet despite falling houses prices, now is the time to start looking at investing in property again

So we have a crisis situation where the taxpayer is having to bail out bankers who have been criminally negligent and idiot politicians who are now panicked into throwing money at the problem because they were too stupid to realise that the inevitable was going to happen on their watch.

Start of article about property prices.

Simply throwing money at the problem is like giving someone a blood transfusion without stemming the flow of blood. Sure there have been tax breaks and sweeteners included in the $700 billion dollar bail out to buy the US representatives loyalty but no one appears to have come up with a real plan to solve the problem.

And has anyone noticed the lack of any senior bankers appearing in the media to give interviews. Banks are always keen to gain any PR they can when things are going their way but now the cat is amongst the pigeons, they have all gone scurrying into their holes to wait for the furore to die down. They should not be allowed to get away with this.

First of all it is illegal to trade whilst insolvent and I would imagine that many of these bankers have kept quiet for some time about their financial predicaments and only sought help as a last resort. My guess is that none of them have really told our governments how serious this banking crisis really is. The truth will out over the coming months.

Arrests and prosecutions should follow with the courts seizing the assets of any bankers who are found guilt of criminal neglect or other financial misdemeanours. No banker or bank should be allowed to profit in any shape or form for what has happened due to their greed and mismanagement.

FALLING PROPERTY PRICES

The Irish government took the unprecedented step of guaranteeing all funds held in Irish Banks, causing investors to transfer money to these banks. Other governments followed suit with large guarantees, exposing their taxpayers to huge bills should any bank fail. There would appear to be little or no cooperation between governments regarding these financial problems and there are likely to be runs on any bank should the slightest ripple of a rumour get out about the stability of its financial resources. It might not affect small investors but companies and trusts who move money around in large quantities will be moving money like there is no tomorrow.

So, despite the fact that our governments are throwing billions at the problem; trust and confidence in the banking and property sectors are not going to return for some time and property prices are going to continue to fall and that means the banks will be exposed even further.

BANKING CRISIS

Of course they could reduce the problem by alleviating their lending criteria, reducing their interest rates, and helping people with mortgage problems to stay in their houses. However, they won't do this because this eats into their profits and could expose them even further to bad debt. As I said earlier, banks will try and profit from any situation no matter who it hurts so long as it doesn't hurt them; and that is why we as taxpayers are being expected to pick up the bill.

Instead, our money will be gifted to them on a platter by politicians who have little understanding of a world economy, banking or the implications of their actions. House repossessions will increase, property prices will fall, bankruptcies become the norm, the stock markets will go up and down like yo-yos, fortunes made and lost with no end product, businesses go to the wall because of the uncertainty of the markets and Joe public, the poor bastard will suffer the most and pick up the tab.

PROPERTY PRICES TO FALL FURTHER

Earlier I said I was now starting to dip my toe back into the market despite the fact that property prices will continue to fall. I'm in the lucky position of owning properties that are unencumbered. Not borrowing money has prevented me from building a huge portfolio and saved me from the war zone that most property investors find themselves in.

When other property investors were mortgaging their souls to buy property at over inflated prices I stopped buying. Unlike the few who saw the crash coming and sold up, I have held on because I could earn more from rentals than I could from sticking cash in the bank and with all this current uncertainty, I am glad I did and glad I don't have too much in the bank to worry about. What I have I am going to get out as soon as possible and back into property.

INVESTING IN PROPERTY NOW

Property developers are either dumping properties back onto the market or simply handing back the keys and walking away. Home owners who had fixed rate mortgages that have come to an end and have little or negative equity in their properties are now finding that they cannot find better deals on the market and having to accept mortgage offers from their current lenders at much higher interest rates. Many of these properties are going to be repossessed which is short sighted of the banks but they are only interested in returns today and aren't interested in the future. Hang on a minute isn't that why the stupid bastards got themselves in this mess in the first place. First time buyers can't get mortgages to get onto the property ladder and anyone having sell a property is seeing the value of the property dropping by the day. All in all, most people are in a desperate position unless they don't have a mortgage or don't have to sell. Time to make hay for property investors who have cash to invest; and if you only have as little as ten grand, and don't want to borrow money to invest in property, I might have something up my sleeve for you; but more of that later.

Investing in property in a falling market.....