With the property market in a state of flux, and with prices still to hit bottom out, it may be understandable that a considerable number of the families who were considering putting their toes in the water of the property market are hanging off for the meantime. Their reticence may well have created a situation where the demand for rental properties have actually increased, and more and more property developers are in the market to pick up properties at their current market value even though they are fully aware that the properties that they are buying may yet fall in value by a further ten or even fifteen percent.

The logic behind their thinking is that, because their may be a shortage of rental properties and a surplus of potential rental clients, they stand a very good chance of recuperating most of the depreciation over the next two years through being able to charge rental fees sufficiently high.

Current trend

The current trend towards find property to buy for let is crowded, with many developers with cash in their pockets scouring the market for properties priced below current market value. There are a number of interesting situations occurring where house owners are actually selling their properties in order to release equity, and renting them back from the developer. With many home owners, especially those fairly recent, first time buyers who are seeing their equity slowly being eaten away, see buy/rent as the only solution of rescuing some capital will move fairly quickly to save capital and some face.

Another untapped market for buy to let opportunists is the large sector of immigrants from Eastern Europe who have arrived in the UK over the last few years, and who are always hungry for cheap rental apartments.

The buyer will expect no more in the first few years than to recover their finance costs till property prices hit the depths of their trough and begin to recover.

As long as prices continue to drop, property investors who are capable of keeping a very accurate track on current market values should be able to find bargains, with the added benefit of knowing that they will be able to rent them out immediately, in a market where the demand is getting stronger all the time.

And how does a property investor know that now is the time to become involved in the buy to let market.  A very good indicator is  the ARLA quarterly survey issued early September 2008. The survey shows an increase in demand of nearly twenty percent in rental property in the preceding quarter, with all indications that this is not a flash in the pan. Instead this is a trend that is bound to continue for the foreseeable future as the owner-occupier market slows down apace.

This increased demand naturally has brought competition amongst renters for good quality accommodation, with rental prices rising by around five percent in the same period, both for houses as well as flats.

Indeed, renting flats in central London has returned to become the most lucrative sector for property development with property values rising by almost fifteen percent and rental charges accordingly.

Buy to Let the place to be

There is no doubt that the buy to let property investment sector is the place to be these days. Tenancies are lasting longer, and when properties become vacant, they are snapped up like hot cakes. On a national scale, rental prices have risen in the last quarter by three percent for houses and a whopping seven percent for flats. The dramatic rise in rental prices for flats has been distorted by the central London flat property gauge, with rental income from flats outside of London rising by around four per cent. Still a very considerable rise.

Popularity: 30% [?]

Now that the property bubble seems to be deflating steadily and not bursting as many financial analysts seem to think it would, it would appear that the time has come for some innovative thinking when it comes to property acquisition. Obviously the rules of the property market are being rewritten with the banks being exceptionally cautious to whom they lend money, and dictating terms that will ensure that the money they are lending is as safe as it can possibly be under the tricky financial situation that it looks like we will be living through for the next few years.

Whilst it is expected that property values could continue to fall as low as 25% of the value they were before the beginning of the credit crunch in the spring of 2007, they will still be much, much higher than when the property boom began in the mid nineteen nineties. In those days, when property prices were still realistic, first time owners has to find the equivalent of six months salary to put down as a deposit and undertake to repay a mortgage that was around 10% of their net monthly salary. So what did it matter to a young couple starting out in life that their first home had an extra bedroom or two, the family would soon grow into it.

In 2008, the picture is entirely different Even with today’s property values being in reverse mode, a first time buyer will need to be able to put down equity that is equal to almost two years net salary for an individual and just over one year for a typical couple either married or not. If the potential buyer has that kind of money at their disposal, then the next thing that they will need to take into account is the weight of the mortgage repayments. Once again, this is  no minor consideration, amounting to around thirty percent of the average net salary of an individual or slightly less than twenty percent for a couple.

If one thing that can be learned from these statistics is that there is safety in numbers. For this reason, a considerable number of first time buyers are considering the option of shared equity, share mortgages and shared ownership. The benefits are obvious, and the disadvantages are few. However anyone entering into such an agreement should do so with their eyes open and their pocket calculator at the ready.

So what are the implications of shared property equity.

The implications are that each partner will own a clear share in the property which will be calculated according to two clearly defined factors.

If these factors are clearly ascertained from the outset, then there is absolutely no reason why the arrangement shouldn’t work.

Shared ownership can provide some interesting possibilities for people who want to get their foot on that vital first rung of the property ladder.

In most cases it will be a couple staring out on life, although it may well be a single man or woman. It might be family members, it might be parents and it might even be parents and children.

What is important is that it is two or maybe more people coming together to share and lessen  the burden of property ownership in these testing financial times. And what can make it more interesting is that one of the partners may not even live in the property that they are part owners of. They may look upon their share in their property as a long term investment, a  cautious entry into the property market,  of simply allowing a family member or a close friend the opportunity of at least partially owning a property.

As long at arrangement are clear cut, there is no reason that a shared ownership arrangement will not succeed and all those involved will benefit.

Popularity: 31% [?]

Buying property abroad is becoming more popular than ever and thousands of people every year are realising their dream and either investing or moving abroad. I have written a 3 part guide to help you with the process of buying abroad.

Before you buy

Always do your research and asking yourself some basic questions, this will help you immensely in the long run. Here is a list of questions you should ask yourself. Write these down on a sheet of paper and keep in your property research file.

There are three areas of buying we will concentrate on:

Why are you buying – For investment, holiday home, permanent move?

For investment

How much can you really afford to put into a property abroad?

This seems a very basic question but one that a lot of people have not really thought about. Investors are human too and can get caught up with their hearts ruling their head and get excited about potential claims that their property could be worth thousands more ina few years time. Do the sums and make sure you can afford to lose what you are going to put into your investment, in other words don’t put all your eggs in one basket.

How long can you tie yourself into the investment?

Are you planning on investing long term e.g. a buy to let or do you want to buy off plan and sell immediately after completion. If you have a great location in a high end market then letting could be a great way to bring in money whilst paying for the property. Make sure your potential rental yield is high enough before investing in a buy to let.

Where are the current hotspots?

This will take some research in itself but there are plenty of websites willing to help you out on this one. Go to property seminars and property trade shows to get some idea.

Is the economy stable?

Again all the research can be done on the internet, join forums and ask questions and check the reputation of the people in there before taking advice. Some good property forums are:

www.totallyproperty.com/

www.propertysecrets.net

www.themovechannel.com/forum

If you can’t sell the property immediately would it be a good letting area?

Always have a backup plan. If you were planning on selling immediately and it doesn’t work out make sure the property you buy is good enough for letting as well as selling immediately. This way you cover your bases.

How close is the airport to your property?

This is often overlooked by investors. If your property is 50 miles away from an airport you have less chance of that property being rented out all year round. So if you are planning on a buy to let property make sure it is near an airport. On the flip side if it does not have an airport and you know there will be one soon, it could be an area to invest in before prices start to rise. An airport being built or a new route to your area of choice is a good indicator that your area is up and coming.

Does the area have good transport links?

Nothing worse that being stuck in the middle of nowhere and no good transport to take you round the area.

Is it easy to buy in your country of choice?

Another important area to look into is the legal side of buying and selling abroad. Make sure you enlist the help of an English speaking expert to help you in this area and they can be your guide to buying property abroad. There are charlatans out there so if you know someone who has done this already ask them to recommend someone for you. Failing that go to the property forums and ask the question.

Is it easy to sell in your country of choice?

Again enlisting the help of an English speaking expert will help you a great deal and help you to avoid the pitfalls of the legal system in your country of choice.

Other websites to help you buy property abroad

www.homesabroad.uk.com/

www.owningabroad.co.uk/

www.worldproperties.com/

Popularity: 88% [?]