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Good news - prices are falling |
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Contributed by Jim Barnaby
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Thursday, 01 May 2008 |
The news today appears to have been rather bad if one only considers good news to be increases in house prices. For those looking to sell or borrow against the value of their house it certainly is, but less so for those looking to buy.
The news today appears to have been rather bad if one only considers good news to be increases in house prices. For those looking to sell or borrow against the value of their house it certainly is, but less so for those looking to buy.
For first-time buyers, of course, the problem has been that the main reason behind the drop in prices - the credit crunch - has been the same one which is restricting accessibility to mortgages, meaning that cheaper prices are counterbalanced by tougher lending criteria and higher deposits, all of which means the buy-to-let industry has a role to play in providing accommodation for those currently unable to get on the ladder.
Today, two surveys have shown falls in prices across England and Wales, with property website Hometrack recording a 0.6 per cent drop in prices in April plus the headline-catching news that the annual price figure was now negative. The Land Registry figures for March did not emulate this, being for a month earlier, but while the annual house price rise was 3.6 per cent this was down from 5.3 per cent in February. In addition to this the month saw a 0.4 per cent dip in prices. Taking into account the time lag in the Land Registry figures, Global Insight chief economist Howard Archer told the Guardian he suspected the Nationwide figures out later this week will also show an annual fall.
But while some will groan at the news, not so buy-to-let investors. Lynsey Sweales, director of the buy-to-let centre, a specialist firm, told the Independent that existing landlords are keen on more UK property investment for precisely that reason.
She said: "Our customers are not worried about falling house prices - they are making use of them to buy more property with enhanced negotiating power."
Ms Sweales added that there were even advantages for "clever" first-time investors who had the cash to spend. She advised: "Estate agents are feeling the pinch, so go and make contact. Ask about properties that have been on the market for a while so you are in a good position to negotiate on price." To this she added the rider that potential buyers should check with a lettings agent that the type of property they are looking at is compatible with local rental demand.
The Independent also noted the continued growth in rental levels, which Andrew Montlake, a broker at Cobalt Capital, predicted would continue to rise in line with demand. Such an eventuality would be the continuation of a trend which, according to recent research by Hamptons Letting Agents, has seen a 33 per cent rise in demand for rental accommodation.
So while the credit crunch may have had some negative consequences for the residential buying market, for those seeking mortgages and those who had invested looking for a short-term buck, it appears that there are plenty in the buy-to-let industry who, if they play their cards right, have much to gain.
In today's world Property investment is an excellent investment option especially investment in UK
Author Bio: Jim Barnaby is a real estate investment broker and successful property investment adviser delivering research and selected UK and overseas property investment solutions with experience in spanish properties, french property investment, German property, Cyprus holiday homes, Property in Cape Verde, German property investment, cape verde property buy to let property |
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