Property investment tips for buyers

Buy at auction

Now is a great time to negotiate a bargain at auction – this year around 50 per cent more properties will be offered at auction than five years ago.

The popularity of buying property at auction has boomed as homebuyers and investors realise they could pick up a bargain.

David Sandeman, managing director of the Essential Information (E.I.) Group, which covers the whole of the UK and sets the industry standard for auction information, has been watching the market for 20 years.

He said: “In a slowing market, vendors are polarised into two groups, those that have to sell and those that don’t. The first group often finds that selling at auction is the best option for a quick and guaranteed sale.

“In addition, a relatively high number of repossessed properties will also come under the hammer in 2008 due to the tighter financial climate.

"With fewer buyers expected this year than in 2007, there are some excellent bargains to be secured as properties will be sold at prices that would have been below reserve compared to last year’s standards.

“Over 20,000 residential properties sold at auction in 2007, a 13 per cent increase on the previous year and an even greater increase is expected this year, offering buyers a huge amount of choice. Buying at auction has become a lot easier for investors of all levels of experience and now is a good time to take advantage of the market.”

Buy now

It’s a buyers’ market – with more sellers than buyers now is the perfect time to buy property. Novice and short term investors are looking to sell, while potential first time buyers are sitting on their hands until they
are more confident in the state of the market.

Property prices are already seeing slight drops in some areas and investors purchasing now will be able to negotiate a better price, take advantage of increased rental demand and higher rents and benefit from predicted falling interest rates making repayments lower than they were last year.

Simon Zutshi, founder of the Property Investors Network, said: “Investors should not be mistaken.With the current market conditions, 2008 is a fantastic time to buy property.

"The market is expected to bounce back and long term seasoned investors can look forward to excellent returns and strong capital growth. All that is needed is a well-thought through personal strategy, as well as strong negotiation skills.”

Buy multi-lets

Multi-lets for professional renters are the most popular area of investment at the moment. Investors buying a terraced house or semi-detached house with three or more bedrooms can rent each room separately and obtain a slightly higher rate by charging per person.

Landlords choosing this option must check whether they need to comply with the Houses in Multiple Occupation regulations.

There is high demand for this type of rented accommodation particularly among young professionals who are not in a position to buy.

Mr Zutshi said: “Multi-lets are currently beating student and family lets when it comes to profitability. If planned carefully, the income should not only cover the mortgage and expenses, but also turn a profit.”

The Homebuyer and Property Investor Show takes place on Friday, March 7, (10 am to 6pm), Saturday, March 8, (10.30am to 5.30pm) and Sunday, March 9, (10.30am to 4.30pm) at ExCel London in the Royal Docks.
For further information visit www.homebuyer.co.uk.