UK Property Investment Blog

Hope you are well, and had a good Easter break!

I dusted down the golf clubs for the first game of the year, and played pretty well, and had a relaxing few days!

Some positive news on property, in the UK, and with a recent survey of high net worth clients also showing that property, and residential property in particular, is still their main area to invest in! We also highlight an exclusive new private finance option for investors as well below!

We also have some excellent new deals due in this week – see below. And for those waiting for information on how to source unlimited below market value opportunities close to home, look out for more information at the start of next week! Read more…

A week may have passed since Property Watch graced our screens, but the impact of their show is still rippling across the press.

The most significant part being their ICM poll.

Asked whether they wanted to see house prices rise again, 64% of the UK’s population stated that they would prefer for them to either remain the same or continue decreasing, compared to 32% who wanted them to rise again.

What does this mean?

Compare these figures to what is currently playing out across the press and the contrast is quite surprising.

Look in any news article about the property market, and they suggest homeowners are unhappy with their properties depreciating in value.

However, as the ICM poll goes on to prove, the public are far more aware of the benefits which can arise from falling house prices than the press are actually revealing.

The ICM Poll – the results

When asked: “Thinking about your current circumstances, do you want house prices to increase, decrease or stay the same?”, the ICM poll revealed two distinct age groups. Those between 55 to 64 and young professionals:

40% of 55 to 64 year olds wanted prices to rise
21% of 55 to 64 year olds wanted prices to fall

18% of 18 to 24 year olds wanted higher prices
52% if 18 to 24 year olds wanted lower prices

Analysing this data it is not hard to see why these distinctions have developed. With many young professionals struggling to acquire the 10-25% deposits needed to get a mortgage, if house prices continue to fall in value, this will help them to invest more easily.

However, for those nearing retirement, losing further equity from their properties could hinder their pension plans.

What about the country as a whole?

Breaking down their findings across the entire breadth of the UK, the ICM poll suggests the further up the UK you travel the more people want house prices to rise.

In Scotland, 38% of those interviewed wanted prices to rise again, whilst 38% of those interviewed in the West Midlands wanted house prices to continue decreasing.

How can this information affect you?

Simple. As an investor who can take advantage of what these homeowners cannot… falling house prices.

As this poll proves, many homeowners are aware of the perks falling house prices can give them when it comes to buying a property. However, without having access to at least a 10% deposit, they cannot take advantage of it.

Curious how you CAN take advantage of this?!

Three pieces of fairly positive property news this week.

Tony Pidgley, the Chief Executive at Berkeley Group, who also called the 1990′s housing market correctly, says we’ve reached the bottom of the market. “We all accept that, give or take 5 per cent, the market is somewhere along the bottom (of its economic cycle).”

Tony was interviewed in The Independent, and stated there will be between 35,000 and 50,000 construction starts on new homes in 2009. And you will recall that the government wants 240,000 new homes built each year just to keep pace with the demand for new households. So based on supply and demand prices will rise.

Also over the last couple of days, the National Association of Estate Agents (NAEA) said the average selling price of a two-bedroom flat increased by 1.6% during the month to £124,727, while the sale price for a three-bedroom terrace increased by 0.6%.

Top end, executive properties enjoyed the biggest lift, with the price for which they change hands soaring by 11.1% during February to average £591,111.

But three-bedroom semi-detached properties and four-bedroom detached homes fared less well, seeing their prices drop by 3.8% and 4.2% respectively.

Peter Bolton King, chief executive of the NAEA, said: “Smaller houses actually saw their value increase – this suggests that people who are buying are picking up smaller houses than they may have done previously, possibly because they can only get smaller mortgages. It may also reflect a trend of downsizing.

The price of small properties and executive homes rose during February but the value of other houses continued to fall, research has showed.

“The very top end of the market has also performed well, demonstrating not only that the very rich can still afford a high end property, but that with plummeting interest rates are now perhaps more tempted to put their money into bricks and mortar.”

The figures come after property website Rightmove said house prices rose for the second month in a row during March.

What does this tell us?

Well as we have felt for the last few months the huge bargains at the lower end of the market may only be with us for the next 3-6 months, as once financing improves more and more people will be looking to buy and snap up the bargains and properties at high yields.

We are busier than ever with new and existing investors – this morning I took a call at 8.30am from someone with over 5000 UK properties, looking to buy another 1000 over the next 6 months!!

It also shows that the larger family properties will continue to slow down, in my opinion, for the next 12-18 months as many professional families will have had a scare and be careful about taking on increased levels of debt on their family properties.

I firmly believe the market will continue to move in different camps ie the lower end of the market, the investment end where first time buyers and investors compete for properties, will be more and more competitive, while the £200,000-500,000 end of the market will continue to slow for the next 18 months.

From the stats above this is looking the way it is going, and I see no reason why this will differ. So buy as many investment properties as can just now, and hold off moving home for a while is my opinion!

Signs that the property market is on the verge of a revival are growing more prominent in the media.

Following a survey by the Bank of Ireland, they found that two in five first time buyers were planning on investing in the property market during the next 18 months. A time frame that correlates will all the other recent action that has been taking place on the property market.

During January and February 2009 alone Rightmove reported an upsurge of interest from 1st time buyers, with a further 36% finalising on sales during this same period.

The impact of this sudden revival in the market is already having a positive effect upon property prices. For 2 consecutive months in a row, property prices have increased by 3% in value.

Combined, all these figures point towards the same conclusion: the property market is changing and is changing for the better.

Continuing in their survey, the Bank of Ireland discovered that due to the current nature of the property market:

70% of buyers surveyed wanted to buy as soon as possible due to low property prices
10% want to invested soon due to low mortgage rates
80% of 1st time buyers believed the market is more affordable
40% believed there is good value in investing in the property market
35% believed there are good rates available

Plus 81% of the people interviewed ranked acquiring a property as one of their top three goals to achieve in the next 18 months: career and further education being the other two.

Put into context, these statistics leave you with 2 promising outcomes: a tenancy group in need of rental accommodation over the coming 18 months, or the perfect opportunity to expand your current property portfolio while prices are still low.

The phrase ‘you get what you pay for’ no longer applies to the property market according to leading mortgage lenders.

Look back 5 years and £150,000 might have bought you a London Garage or a small 1 bedroom terrace, but in the current financial climate this figure now holds a whole new meaning for investors.

In a report released by Nationwide they reported that the average UK property is now worth £150,501 with the key difference being the types of property investment that are available to you has substantially grown.

For £150,000 you can now invest in a 2 bedroom semi-detached in Cheshire or a 1 bedroom Victorian studio conversion in South London. Essentially, properties that were previously out of reach, are now more widely affordable and easier to attain.

However, this is not the only positive news to come from these price falls. Under the governments new stamp duty scheme, each of the afore mentioned properties require no stamp duty fees:

Up to £175,000: 0%
£175,000 to £250,000: 1%
£250,000 to £500,000: 3%
Over £500,000: 4%

With property prices at their lowest since May 2004, the combination of the above information with these figures means investing in properties has never been more profitable, making now, more than ever is the perfect time to start structuring your property portfolio for success.