From the city of jazz to house-buying blues

Imagine being in the position where you could splash out pretty much any amount you wanted on any house of your choosing. No need for mortgages, loans, bridging finance or part ownership – simply pick the property and open your wallet.

Imagine being so rich that you could do this not only for your residential home, but just because you felt somewhere was "interesting" and would add nicely to your collection.

A shocking acquisition

Enter Nicholas Cage. The actor-cum-property entrepreneur is known for having a keen interest in historical buildings. He has a number of such buildings in his portfolio and recently added another. 1140 Royal Street in New Orleans is one of that city’s most famous haunted houses.

It was built in 1832 for the Lalaurie family, who were rumoured to have committed horrible murders in the house and disposing of the victims in the garden. Now known as the Lalaurie or French Empire mansion, it has lain derelict for much of the time since the family were run out of New Orleans.

On a number of occasions, it was put to use for one business venture or another, but most were very short-lived, with the owners citing numerous strange goings on. In fact the only successful business appears to have been when the building was opened as the Haunted Saloon, with the proprietor keeping a book for his patrons to record any strange goings on that they witnessed on the site.

Cage keeping good company

The building – which went for £1.75 million – joins a number of other properties in the Cage portfolio. These include high-priced acquisitions in San Francisco, Los Angeles and Las Vegas.

The actor also has other properties in New Orleans – and he is not alone. Angelina Jolie and Brad Pitt bought a mansion earlier this year that is right around the corner form Cage’s latest acquisition in the French Quarter, said by Berg Properties to be "getting more and more star-studded all the time".

What about the rest of us?

For most of us, the French Quarter would be but a distant pipe dream. Most Britons – and especially first-time buyers – would be happier being able to buy a property anywhere, regardless of whether or not it came with celebrity neighbours.

In the current property market, it has become increasingly difficult for first-time buyers to get the money together to acquire their first property. Government figures suggest that there is nowhere in the country that has an average house price lower than £100,000.

Finding fulfilment abroad

Because of this, many are turning not to the French Quarter, but to France itself. According to foreign property investment firm Investors Provident, many first-time buyers – finding themselves priced out of the UK property market – are now looking to buy abroad and rent their home in the UK.

This situation has been brought by a number of factors. The house price market has seen prices undergo phenomenal growth in recent years, requiring prospective buyers to obtain mortgages that are larger than they would have previously had to acquire.

Will interest rates and house prices keep going up?

Many mortgage providers – such as Abbey and Halifax – have taken the step of offering mortgages in 5x salary multiples alongside the traditional 3.5x multiple. In addition, an increasing number of buyers are opting for 95 or even 100 per cent loan to value on their mortgage.

This financial burden has been enough of a blow to first-time buyers, but it has been compounded by an ever-increasing interest rate. The base rate has gone up five times since August 2006, to reach its current level of 5.75 per cent. however, many analysts have stated that the state of inflation – which is still riding high – means the base rate will top six per cent before the end of the year.

What next?

If you’re a first time buyer you can get free advice on the whole mortgage market at MoneyExpert.com. Click here to compare mortgages

If you’re a homeowner and were thinking of re-mortgaging to free up equity you could instead take out a homeowner loan

For money saving advice and tips click through to MoneyExpert.com

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