In addition, experts at the forthcoming Property Investor Show (23 to 25 September, ExCeL London) are broadly in agreement that the remainder of the year is likely to see continuing stabilisation in house prices, with plenty of opportunities for property investors to be making money, providing they are investing in the right areas.
Stable market
Several doom and gloom merchants forecast at the beginning of the year that house prices would fall by up to 40% over the next few years. However market reports show that although the market has stabilised from the rapid growth of previous years, inflation has remained positive to date, with average national house price growth at approximately 5% according to official government figures [see table 1].
Nick Clark, Managing Director of the Property Investor Show, comments: “The UK housing market has performed spectacularly over the last few years so it was no surprise that things were going to have to slow down eventually. However many so-called experts have been overtly pessimistic in their predictions for the market’s future in their quest for media notoriety at the expense of sensible analysis. Double-digit house price inflation was indeed unsustainable, but wider economic conditions and the continuing high demand for housing lend themselves to a relatively strong market and, at the very worse, a stabilisation of prices.”
Expert verdicts
Many of the experts exhibiting or presenting seminars at the forthcoming Property Investor Show remain positive about the prospects for the UK housing and buy-to-let markets.
Barbara Goldsmith of Stratford Properties advises: “If you are looking at investing in property at the moment then you do need to be in it for the long-term. There is a tonne of money to be made but in these uncertain times you need plenty of contingency funds to cover unexpected events. A big deposit is essential; you can no longer enter by the skin of your teeth and you cannot over-leverage yourself --– high debt is not advisable in uncertain times.
“I think that we are likely to see rental demand increase over the next six to twelve months, but to make the money you need plenty of contingencies and of course, you need to be investing in the right areas.”
Andrew Demain, Managing Director of David McLean Homes, predicts: “I see a steady and more realistic market on the horizon with prices inline with affordability and inflation. The days of hyper double digit growth are a distant memory and are unlikely to return for many years to come. However the recent reduction in interest rates by the Bank of England has greatly helped restore confidence in the market and a continuation of their downward trend will act as a further boost to confidence.
“We are seeing investors fleeing the South East and looking increasingly towards the North West, Wales and the South West where the market is more sustainable. These areas are likely to continue to outperform the rest of the UK but I’m confident the last quarter of the year will see year-on-year increases across the country.”
David Bexon, Managing Director of SmartNewHomes.com, comments:
“In terms of the residential housing market, there are certainly less buyers around at present which is causing the stabilisation in house prices. However many areas are still able to provide investors with a long-term attractive investment, particularly if opportunities such as off-plan discounts and guaranteed rental yields are taken advantage of. With interest rates finally cut and likely to be reduced again by the end of the year, 2006 should see single-digit house price inflation as the market returns to healthy, and more sustainable levels of growth.”
Kamran Mahmood, Director of MiNC Property Enterprises, says: “On the whole, the housing market is in a healthy state and, looking at the financial markets as a whole, the property market should remain stable over the next three to five years.
“Buying to let can still be very lucrative as long as investors do the right research and buy carefully. The days of boom and bust appear to be over and the property market is a lot more accessible. When once property was seen as a peripheral investment, it is now seen as a central part of any successful investment portfolio.
“A further cut in interest rates next year would be good news for the investment market and the changes to regulations on SIPPs should provide the property market with a huge boost.”
*** The Property Investor Show, to be held from Friday 23 to Sunday 25 September at the ExCeL centre in London’s Docklands, will feature almost 250 exhibitors specialising in all areas of property investment both in the UK and abroad, as well as expert seminars and workshops.
Property Investor Show the television programme is now being broadcast on Real Estate TV (Sky Channel 250) every day at 9pm.
For further information and advance booking for the Property Investor Show, visit www.propertyinvestor.co.uk
