Nationally the fall in housing valuations in the UK is certainly not
unexpected.
The UK housing market has been characterised in the last 30 years by an
increasing population density, tighter and tighter planning controls and a
cultural predilection towards housing owner****p.
Ramped up demand in the last 2-3 years has been fuelled by a variety of
economic and social factors. The Buy to Let sector, rising equity
valuations, strong economy, rising confidence, pension restructuring and
stockmarket uncertainty are all contributors.
A massive rise in the Buy to Let sector, has added to the usual cyclical
recovery in the UK housing market since the late 1990's. The Buy to Let
movement has been stimulated by two major issues affecting the investing
British public.
Firstly, lack of performance and volatility on the stockmarkets has
alienated the m***** who are still recovering from the dotcom boom and
bust.
Secondly, all TV channels carry at least one housing make-over type
programme which indicate returns to investors which have made their mouths
water. In addition, nearly all these investors have had contact with an
acquaintance who has recently "made money" in property - the ultimate
stimulus - "if he can do it so can I".
Combine this with the practical commonsense nature of the property market,
and throw in m***** of funding resources from Banks and Building Societies
(at up to 85%), and you get a boom, upon which it is considered normal
practice to "gear up" on.
Returns from rentals have fallen well below the 5% mark in London and the
South East, which really takes them out of the realms of an investment,
and
over to a speculation. This is in spite of a rise in the need for rental
property and rising rents. Therefore, property investors have been chasing
the market.
The increases in bank base rates over the last 9 months have made the Buy
to
Let market much more risky. And lending rates should make property
investors
look for sustainable rental yields.
Now Nationally, this is all true, but in the North East and North West,
where there are booming city centres in Leeds, Manchester, Liverpool, and
Newcastle, property rental yields are much higher. In York****re, there are
still op****tunities to make in excess of 14% pa rentals in areas that are
being sup****ted by inward investment. That is companies and their staff
are
moving out of the expensive South East to the scenery of the North.
Therefore it is likely that for some time regional areas such as
York****re,
Teesside, Tyne & Wear, and Lanca****re will continue to offer both
sustainable yields and increasing populations to sup****t their housing
markets. We wish to sup****t these areas that are rich in cultural heritage
as well as having vibrant economies.
As a property letting and funding agency represented in these regions we
have created an innovative web site to allow ex-pats, overseas investors,
and UK investors, as well as inward moving tenants to search for and
match
properties regionally. The first ****tal is focussed on York and North
York****re, with plans well advanced for West York****re, Tyneside and
Manchester.
For a demonstration follow the link below
http://www.ascot-lets.com/letting/let_index.php
The UK housing market in not homogenous, and regional variations exist
providing the op****tunity to invest, as the South falls in value.
John Burke
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