Market Commentary Property Investment April 2009

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Property Investment typically breaks down into property funds and syndicates; buy to let; self build and developing; renovation; commercial and overseas. Here's a brief summary of each market:-

Funds and Syndicates
These typically invest in commercial property, so some of the performance over the last year or two for funds and syndicates has been diabolical. For example, read this article on Scottish Widows. However, when the market is at it's lowest is often the time to buy, especially if someone in a well performing syndicate is desperate to sell. However, it's essential to seek independent financial advice, and if you don't have a good IFA, make sure you contact us on enquiries@designsonproperty or 0845 838 1763.

Buy to Let
As indicated in our Renting and Letting market commentary, it's an interesting time for BTL. Some seasoned landlords are snapping up bargains which they can rent out at competitive levels, while other landlords are struggling for tenants and to pay the bills. For those not caught out by the credit crunch and have deep pockets for high deposits, entering BTL now is a good option - as long as you know what to look out for and don't just rely on the rental income to make your money!

Self Build and Development
Depending on whether you are planning to self build or develop for profit this year or next, will depend on whether this is the right market. At the moment it's probably best to plan buying and holding the land while you can secure residential land at 50% or more BELOW previous levels, see our Land Market Update.

Securing deals on timber framed kits from struggling companies and cheaper materials from desperate merchants can make it worthwhile building now, with an option to rent when the property market starts to recover. However, be warned that unlike the last few years, you won't be able to sell 'anything', so build what the local market needs and can afford - don't go for expensive properties that won't sell!   

Renovation
Any renovation project is tricky to make it work currently, unless you can secure the property well below it's market value. It's hard to turn a profit due to the time it's likely to take to sell on, so renovators need to be careful on their budgets and be sure to build in a 10% decline in prices, just in case! Although renovation projects are often more appealing than self build initially it's likely to be the latter that will more easily turn a profit in the current market.

Commercial
Commercial prices have dropped so significantly that if you know where and what to buy and can be sure of a good tenant, then the cost of borrowing versus your rental income is likely to start improving. So much so that commercial investment is beginning to become a viable alternative to residential. Read More

Overseas
Well this market is seeing some bizarre twists! For overseas buyers keen to get their hands on real estate in London or other parts of the UK, now is a great time to buy with the exchange rate at an all time low!

However, if you are trying to sell overseas things are not good as second hand home buyers from the UK have pretty much disappeared with the credit crunch! Those that are able to still purchase can bag a good holiday home bargain from desperate sellers.

Major overseas projects with a good long term economic future are still attractive to investors as capital growth in the UK is unlikely to return for several years. Read More

For more market commentary on a national or local level:-
Contact Kate Faulkner on 07974 750562 or 0845 838 1763. To read more about Kate, please visit ABOUT US, see Kate on video and for media appearances, contact:

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