Assetz® News - Armageddon postponed

Armageddon postponed

12th March 2008 |

Just where is the buy-to-let market in the UK really going? The question has been hotly debated in many circles, so not surprisingly various experts on different sides of the debate were drawn together for a public debate at the recent Homebuyer and Property Investor Show.

The title of the debate - "Is the UK Buy-To-Let Market Facing its Armageddon?" - may be regarded by many as being somewhat melodramatic. But it reflects clearly enough some of the negative headlines about the industry. That there was a question mark attached to it, however, recognised that for many there is a clear answer and that answer is no.

Of the panel, Neil Lewis of investor website Property Secrets was perhaps the most downbeat. He commented: "This is a sentiment-driven change … but that sentiment has remained negative for some time and is now having a very real economic impact."

"You should stay away from making additional new investments into UK property for the next 12 months," he advised.

This strong advice, however, was contradicted by Ray Boulger, senior technical manager for mortgage brokers John Charcol. He said that while there had indeed been a downturn - essentially a trend that was happening anyway but had been "exacerbated" by the credit crunch - this did not mean investment was out of the question. He stated: "If you can look at property in an unsentimental way… and not be tempted to bid up, then I think you can find some good deals this year."

Others also gave positive assessments of the market. John Wriglesworth of the Wriglesworth Consultancy said the "fundamentals" of the sector were unchanged, while David Austin of consultancy Property For Life declared himself to be "still very positive", adding "once all the bad news about the credit crunch has gone it will return to normal."

As for the way that some investors with short-term visions and small amounts of capital had been pushed out of the market, Seamus Nugent of developers dandara regarded this as a kind of cleansing, stating that the sector could happily say "good riddance" to such people.

"Property investment is a long-term punt, not a short-term gamble," he emphasised, repeating an oft-heard piece of advice.

Indeed, good advice is what it is all about, according to mortgage services company Blevin Franks. Away from the heat of the debate, managing director Christopher Tanner insisted that the market remained "bouyant" and that the main issues for new buyers in the industry were always the same.

He said investors would be fine as long as they "do their homework and buy the right property, don't overpay and get the right advice regarding their finances". To this he added that not taking on unaffordable loans or getting left open to having no money in void periods were also vital precautions to take.

He concluded: "So just be cautious, take the right planning and you should be ok."

So it seems most professionals in the market are agreed: buy-to-let is still in good shape. Not only is the world not about to end, but the future is bright for those who invest wisely and for the long-term.