UK property market, problem selling a house, difficulty getting a mortgage, money saving ideas, room in the roof, property extensions, low cost remortgages

Whilst we were warning property investors that the property boom was about to come to an end and to sell up and liquidate their profits, estate agents were continuing to sell property at over inflated prices and banks only too willing to lend up to 125% of valuation. Now, anyone is going to have a problem selling a house and buyers will have difficulty getting a mortgage.

Start of article about the UK property market.

Right up to the last minute and even now, naïve property investors will little experience were being persuaded to invest in properties at prices that were over inflated and now find themselves with property portfolios with negative equity. Many are technically bankrupt, if they have not already gone to the wall.

Unable to rent their properties at a rental that covers their mortgages and unable to sell their properties for what they paid for them, the trickle of properties being dumped back onto the market has become a waterfall with hundreds of properties with vacant possession available.

• Cheap interest remortgages
  
  
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• Sell you property privately by building your own website and save thousands of pounds on estate agents commissions

Property is and always will be a good long term investment for anyone who is cash rich and can afford to invest in property and wait. However, many property investors were buying property that returned as little as 6% rental income. With mortgage rates of just 4.5%, this just left a margin of 1.5% and precariously close to financial disaster should mortgage rates go up; which they did or property prices were to drop; which they have.

It isn't so long ago that if you had approached your bank manager for a loan with this sort of business model, he wouldn't have looked twice at your proposal. However, bank managers or their equivalents were under pressure to lend because of the huge amounts of money they were borrowing on the discount money markets.

Rank stupidity all the way up to boardroom level and still it continued even when they recognised they had a problem. Then when the American property market crashed and banks were unwilling to pour money into the money markets and foreclosures in the sub -prime lending markets started to rise, the cash flow took a pounding. Coupled with the slowing down of the UK property market, compounded by banks pulling out of the sub-prime lending market and the result is exactly as we predicted it two years ago.

Incompetence of such a level that the HSBC, Britain's largest bank has had to write off £8 Billion pounds in bad loans. With the other banks also writing off billions, this fiasco could easily have been avoided but none of them had the balls to move out of the market before their competitors. It was a game of Russian roulette with virtually every barrel carrying a bullet.

So where do investors and first time buyers stand as far as the UK property market is concerned.

An extra bedroom in the roof or an extension can add 11-15% to the value of your property saving you a fortune on moving. By improving your home, you can save on:

• No conveyancing fees
• No removal costs
• No home information pack
• No stamp duty
• No estate agents fees
• Valuation and survey costs
• Furnishing and redecoration costs
• Far higher mortgage repayments

If you own a property and are considering moving, now is not the best time to sell and if you don't need to move, you should seriously consider enlarging your current property. This should prove to be a far better option than selling in today's property market.