Where is the property market in the UK heading?

There has been much talk in the media and amongst property pundits about where the property market is heading - will we see prices drop or steadily increase?

Property is a medium to long term investment strategy and hence professional investors somewhat ignore the talk and do the Business. Historically Property prices have increased every seven to ten years in the UK and even though the 'boom' is long gone; prices will go up eventually. A professional investor see's beyond the opinions of 'would be' investors or so called professionals in the industry, as quite frankly everyone is entitled to an opinion, however no one really knows where the market is heading. This ability to see beyond coupled with a well researched strategy is what differentiates the average investor from the professional investor.

Warren Buffet (the World's acknowledged most successful investor) said: "Be greedy when others are fearful and be fearful when others are greedy"

Over the last 12 month's the average house price growth has been between 8 - 10%. As a matter of fact the monthly volatile figure communicated by the mortgage lenders and other indices still averages approximately 5% growth per annum annualised.

The Bank of England recently announced Interest rates reduction of 0.25% bringing the base rate down to 5.5% and this is further expected to come down by 0.5% in the next 12 months. Many investors on variable rate mortgages linked to the base rate tracker will see a drop in their payments and the mortgages will no doubt become more competitive. Generally as interest rates go down, house prices go up.

The demand for rental is at its highest due to a number of factors:

• People living longer - the average life expectancy has increased.
• First time buyers dropped from over 20% of the market to less than 10%.
• Massive immigration.
• Undersupplied of housing in the UK - 180,000 houses a year approximately being built against a target of 240,000 a year.
• UK population is set to increase by 4.4 million to 65 million by 2016 representing an enormous extra demand for housing when there is already a shortage.

More demand equals higher rents and higher house prices. Buying cheaply in a strong rental market will significantly enhance yields for buy-to-let investors and allow mortgage costs to be covered relatively easily and relatively quickly.

At Buy Investment Properties, we source property at up 35% below market value. This means you are protected against any downturn in the market and of course benefit from instant equity on day one as well as positive cash flow.

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