Rents are increasing - investment properties in the north east

Almost every marketplace is driven by the supply / demand, even in the property market. Investment properties in the north east are a good example of this, simply put the UK is an island with only so much land where we can build. The population is not getting any smaller but increasing, so we all need somewhere to live. Hence due to the current credit crunch it is becoming increasingly difficult to buy properties and so the majority of people are renting. There is more demand than supply in the present climate which in turn drives rents up.

If you look at the basic facts, it is estimated that there is a housing shortage of 400-500,000 properties in the UK. As a matter of fact the Joseph Rowntree Organisation thinks this is just getting worse and will increase to 1.1 million by 2022, this effects the whole of the UK, from Londdon to the North East. In 2006 160,000 properties were built and in 2007 approximately 150,000, which is clearly not in line with Government targets of 240,000 per annum. With the credit crunch the property development sector has been greatly impacted due to the finance not being available and investor confidence and consequently in 2008 and 2009, it is predicted that the amount of properties being built will greatly decrease. Furthermore local planners are making life more difficult for developers and it is getting harder each and every year to build anything!

To conclude although the economists predict property prices will drop, the reality is not as bad as they make it. Rental demand is at its highest and rent are on the rise. A property correction is needed however it is a matter of time before we see the lending criteria loosen up and property prices steadily rise. Our advice would be to ride the credit crunch while you can and pick up the bargains.

Check out our current property deals section for great properties with very little money in, we now specialise in the north east area of the UK and have managed to produce some great ready-made deals for our investors!