My situation is that I'm looking to buy a house at the moment but am concerned that UK house prices are currently overblown.
It's a bit of a strange situation, but this particular house is a kind of "now or never" type affair, so waiting for house prices to fall and then buying is not really possible, and overall I'm not convinced that house prices will fall anyway, I just want to hedge some of the risk that buying an expensive house would foist upon me.
So, assuming I buy this house, I'm wondering how best to hedge this risk, and have thought of a few things:
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Short the housing index. The problem with this is that I don't know of a mechanism to do this. If I could find a CFD/spread betting provider that offers this as an index or ETF it would be easy, but I don't know of any that do currently.
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Short individual stocks that are correlated with house prices, e.g. housebuilders, with a CFD/spread betting provider. The problem with this is that the correlation isn't that strong, and my fortunes would be intertwined with the idiosyncratic fortunes of a rather slim portfolio of housebuilders.
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Buy an inverse ETF that's inversely correlated with house prices. The problem here is that inverse ETFs are not a good long term option for what I want (http://ift.tt/1MjOEex) and I can't find one anyway.
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Short gilts on the assumption that if interest rates go up then house prices will fall. I have no idea if this would play out in reality!
None of these options are brilliant, so I'm wondering if there's something else I haven't thought of...? Or elements of these options that I've missed?
Submitted January 17, 2017 at 11:55AM by MellowMatty http://ift.tt/2j5BsUA
