To buy or not to buy..........

That’s the question! Which way is the housing market going? Lots of people comment intelligently on this subject, but in reality, who really knows? I have a number of landlords who are looking to invest further in property, attracted by recent falls in house prices. But should they jump in now, or should they wait? I’d suggest the following:

·        Housing is a long term investment, not a short term one. Over the last few years people have forgotten this and have treated the UK housing market as a ‘get rich quick’ scheme. As a result people who have invested for the short term are very much feeling the pain of being trapped in negative equity. Equally, there are plenty of plenty of others who are relatively unaffected – they are under no time pressure and are unconcerned by the recent dip in fortunes.

·        It’s more or less impossible to pick the bottom of the market, and because of my first point, it shouldn’t really be necessary to do so. If you manage to pick it, I’d suggest it’s more by luck than judgement. To be successful, you just need to make sure you don’t overpay in whatever market you’re buying in. My most successful landlords are the ones that pick up the bargains – they study the market, don’t get pressured into buying by estate agents, but when a genuine deal becomes available they move quickly and decisively. You’ll often find the best buys are properties in poor condition – successful landlords aren’t put off by this and simply include the cost of works in whatever they are offering for the property. However bad the market, well presented properties always command a relative premium and as such usually aren’t the bargains people think.

·        As we stand currently, the sales market is moving slowly in both towns – particularly in Rugby. The volume of sales being achieved by local agents has been low all summer, with sellers holding out for decent prices in an average market. If this continues, there has to be further downward pressure on prices in the next 3-6 months, which presents opportunities for serious investors. This further re-enforces the idea that whilst now is a good time to buy, it is extra important not to overpay.

In both offices, we maintain a list of landlords who are looking for more property in the near future. When we become aware of a suitable property, we email round and generally someone picks up a decent deal. 17 properties have been acquired by our landlords in this way in 2010. If you want to be included on these email lists, even if you’re not currently a Belvoir customer, drop me an email and let me know.

Richard.