Not so long ago everyone who was anyone was buying property for investment. Buy to let was the golden goose, the road that, if you got on it, offered unlimited cash for as long as you wanted it. Nothing could go wrong could it?
Well, as we know it did – spectacularly so. The housing market suffered across the board, but buy to let landlords were especially badly hit. Of these the most affected were those who had left it late to jump onto the bandwaggon. They’d bought at the top of the market and were now facing some pretty unpleasant numbers.
Not that many people wept. These buy to letters had been responsible for inflating the market to such unsustainable levels. The consensus from all around was that they’d got what they deserved. People simply turned away from buying property for investment and instead chose to look at it in the way it had always been intended – a place to live.
That spelled bad news for the plethora of programmes that had sprung up helping people to make money from their homes. It wasn’t that people were interested in these shows; it was just that nobody believed the hiatus on buy to let could possibly last.
But it has and 2010 looks set to remain a quiet year. Barely one in ten of new buyers say they are buying property for investment. It simply isn’t the right time. Uncertainty hangs over the market despite gains in the latter half of last year, and while that remains, finance for new purchases remains elusive. There is relatively little choice in terms of buy to let lenders and they are being extremely conservative when it comes to lending levels.
However, there are signs of improvement. The number of lettings has risen. The amount of time houses are left empty between tenants is falling. Activity and interest is back in the market with people looking to take advantage of depressed prices.
In London in particular the outlook is quite positive, particularly for those looking for a long term investment. That’s because prices in the capital have not followed the same trajectory as elsewhere in the country. Property here remains highly desirable and so if you’re looking for an asset class that is going to hold its value you really can’t do better than this.
So it is too soon to call time on the notion of property for investment. Activity in this sector will grow. The challenge is to identify the correct time to enter the market. Timing is everything.
Dom Donaldson is a financial expert.
Find out more about Property For Investment at http://www.millionaire-investments.com/
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