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Introduction

Investing in property has always brought its fair share of hard work and today’s market is no different. There will always be challenges but there can be rewards too. Many property investors are making the most of the current conditions by searching out the bargains, maintaining a balanced portfolio and continuing to take the long term view. Whether you are an experienced investor or an accidental landlord you have to look at your investment as a business, after all you are providing a service to your clients, and in any business you have to take the good times with the bad. The ability to adapt quickly, seek out the opportunities still available, and use them to your advantage are essential tools to any business, property investment is no exception.

In this month’s newsletter we continue to take a look at the difficulty of predicting when the housing market will hit its lowest point and the action investors need to be taking to ensure they don’t miss out. We also highlight the great opportunity auction rooms across the country are offering, the rise of cannabis factories appearing within the rented sector and what you as a landlord can look out for to ensure its not happening in your property.

Will you be missing out?

If you are in a position to expand your property portfolio now is definitely the time to consider doing so.

House price indices, which show house price falls ranging from 10-16% in 2008, will continue to show falls for some months to come, but investors and home buyers should appreciate that these indices are significantly delayed in terms of data capture, by as much as three months. A buyer, who waits for two or three consecutive rising months from a house price index, will probably have missed the bottom of the market by at least six months. In addition, the pricing in the distressed market will have improved significantly by the time house prices start to turn up, meaning the bargains available today will be long gone.

Investors may have to fund a larger deposit in terms of percentage than they did this time last year but the decline in house prices, over the same period of time, is helping to balance out the equation. If you do your homework and purchase in an area where rental demand is still strong the rental yield could actually be a lot more attractive today than it was 12 months ago. With interest rates so low and continued volatility in the equity markets, rental yields can offer better returns.

Savvy investors know they will secure the best price while consumer sentiment is at its worst, not when the press is reporting a market recovery. Professionals need to read the early warning signs, by watching the auction houses and monitoring the sale prices of distressed property.

Auctions – where the action is happening

With more and more repossession coming up at auction property investors are utilising the opportunity to find their next bargain under the saleroom hammer.

The number of repossessions going to auction has increased by 100% from 18 months ago* and December 2008 alone saw 3,189 properties up for grabs in 100 different sale rooms across the country, of which 2,147 were sold, a total of (67%)*.

As with any property purchase you need to make sure you have your finance in place. This is even more important when purchasing a property at auction as you are expected to pay a deposit on the day and complete within a short period of time, usually within 21-28 days of the hammer falling.

To make the most of the auction opportunities available speak to your dedicated Money Centre consultant or call us on 0800 374611.

*Source: www.eigroup.co.uk - February 2009

The Money Centre’s top tips for purchasing property at auction

Before an auction

On the day