In its latest report, it states there is currently a great deal of pent up demand from buyers who are eager to buy but cannot secure the necessary finances. As a result, as soon as the mortgage market improves, a surge of activity is expected, as buyers flood the market. They will experience very low new-supply from developers and, combined with a general housing shortage, Assetz expects prices to return to a steady upward trend in the second half of 2009.
Assetz also believes that experienced buy-to-let investors are in a strong position to weather the current storm and to benefit from the increase in demand for rented accommodation. The current negativity has resulted in a significant fall in the number of first-time buyers entering the market over recent months, with many expected to stay away over the short term. As a result, strong rental demand is set to continue, providing good news for landlords.
Stuart Law, chief executive of Assetz, commented: “We are in a period of weakness, not a crash, and vendors are more easily negotiated with, provided they are a forced seller. I would recommend that investors take advantage of the current market and continue adding to their portfolio by buying from motivated sellers.
“Recent research has suggested that new home starts will fall to dangerously low levels this year – with only 110,000 new homes expected to be built by the end of 2008, less that half of those cited by Gordon Brown (240,000) as necessary to meet demand, followed by 80,000 or less homes expected to be built in 2009. As a result, house prices will rise again through raw supply and demand imbalance, with rents rising extremely strongly in the short term and firmly for many years to come.”
