Assetz^® News » HOME | FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE

Assetz^® Property News Service

UK property investors tempted home as markets moderate

---

With developers moderating their asking prices, deposits on exchange falling to just five per cent and the housing market looking up, property investors are returning to home shores again reports Assetz.

Potential UK buy to let property investors were put off UK purchases between August 2004 - 2005 as over ambitious and unyielding developers attempted to exploit high prices to the fullest, says Assetz, and looked overseas to less expensive markets.

Even including off plan discounts, many found themselves deterred by what they considered excessive demands. But a culmination of interest rate cuts and pressure from banks to achieve sales targets has forced the market back into balance with realistic pricing and new opportunities opening up all the time.

"There has been a noticeable surge in UK investment purchases over the last month as UK investors realise there is money to be made on home shores again, without the hassle of overseas jet to let investments," said Stuart Law, managing director of Assetz.

"According to Paragon, rents are rising at 10.5 per cent per annum, suggesting that rental incomes will soon well exceed the cost of a buy to let mortgage and become profitable again. We expect to see house prices rising at five - seven per cent next year, offering the potential for vast returns on minimal initial investments," he added.

Adding to the impetus, new property investment deposits on completion have fallen to as low as five per cent, down from a historical norm of 15 per cent. The developer will often contribute to the balance of the deposit in the form of a subsidised deposit, similar to those often provided to first time buyers.

Others are supplying cash-back rent guarantees. While this has yet to become standard practice, those that do are spearheading the market revival. Deposits on exchange have also fallen back to five per cent in many cases from the ten per cent property investment market average of last year.

This has meant that investors have less cash tied up in any single property investment on exchange and that less cash is also required to complete, meaning increased returns if prices rise. Built in equity from property purchase discounts also provide a safety net against any future price falls.

Assetz has offered the example of Maritime Quay, a complex of 32 one and two bedroom properties near Liverpool. Property investors are only asked for an initial five per cent deposit on exchange which adds up to just one per cent after cash-back from the developer on completion, on annual rental yields of at least £5,700.

---

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

Terms of content usage:
XML and other types of publication of this article title and the URL of this page are permitted using the RSS feed or other methods.
Article content strictly prohibited from duplication on any other site directly other than first paragraph included in the XML feed.

Copyright © 2001-2008 Assetz® News Limited. All Rights Reserved | Company Information | Assetz® Homepage
Assetz House, Newby Road, Hazel Grove, Stockport, Cheshire, SK7 5DA
TEL (UK): 0161 456 4000 FAX: 0161 482 7588
TEL (International): +44 161 456 4000 FAX: +44 161 482 7588