Investing in UK Property

The recent gains in house prices over the past decade may indicate that the prospects for investors in the UK property market are pretty meagre. In fact some would argue investing in the UK property market would be a bad move because they are now overvalued and are set for a price correction. However, despite the most pessimistic house price predictions there are some reasons to indicate investing in the UK property market may be a good long term move.

Advantages of Investing in UK Property

1. The ratio of house price to incomes has increase, but, it is not completely unsustainable.
   Lower long term interest rates. Since independence of the Bank of England average base rates have been lower making borrowing relatively cheaper than previous decades. In the foreseeable future we are likely to see the continuation of low nominal interest rates
2. Historical Gains in the housing market. According to Nationwide statistics UK property prices have increased by 9.28% since 1953. This increase offers better returns than savings in a bank and investing in the stock market
3. Shortage of Supply. Although temporary demand side factors may reduce house price growth. Long term factors suggest the UK will continue to experience a shortage of supply. This will push up long term prices of homes in the UK
4. Demand For Renting. With a shortage of supply and increasing population there is strong renting demand. Therefore incomes from renting will remain good.
5. Becoming an Expert Property Investor. Even in a stagnant market there are options for making capital gains out of property which is undervalued. Often property investment requires a good knowledge of local property markets and how to renovate housing.
6. According to some so called expert the Housing Market has been on the verge of collapse since 2002
   Buying new houses before they are put on the market. According to Inside Track 90% of new properties have been bought before they even hit the market.

Disdavantages of Investing In UK Property

• House prices may be set to fall
• Is 2008 A good time to buy?
• UK Housing Market