UK property market slump, difficulty selling a house, building extensions, rooms in the roof, remortgages, cheap home improvement loans, money saving ideas
What you are seeing is just the tip of the iceberg. It is the amateur buy to let landlords who have simply seen investing in property as a quick way to make money in the short term that are now feeling the pinch. Property investors who have gone on a buying spree, using one property to finance another and then suddenly finding that their property portfolios have gone down like dominoes are just a small percentage of the property market.
Start of article about the UK property market.
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There are some big players out there who have hundreds of properties that they have used to finance one purchase after another, using the equity they have gained in one property to raise the money to buy their next property. They have been working on such small income margins that if a property remains empty for more than one month, they have made a loss on the rental return for more than a year.
Last year they may have been sitting on a property portfolio with equity that on paper at least made them millionaires. By the end of this year, many will be in a position where they have a property portfolio with millions of pounds worth of negative equity. Technically bankrupt and dependent on the banks to keep them solvent until property prices rise.
WHAT IF PROPERTY PRICES DON'T RISE?
The problem is, property prices are unlikely to rise and will almost certainly fall further. Blind to this ever happening, although God knows why, many of these landlords are in a very grim position. You only need a few properties standing empty for a few months without any rental income but with mortgages to pay and you start to rack up losses of tens or even hundreds of thousands of pounds. Landlords who have been in the market for some time can afford to swallow these losses if they still have plenty of equity. However, many have simply gone on a spending spree, borrowing the maximum they could, betting that the markets would continue to rise.
And all the time the banks were keen to support and lend them money, this was fine. Now the markets have turned, and property owners start to default on their repayments, the banks who were their biggest ally are now likely to turn on them and look at ways of cutting their losses, forcing landlords to sell or even repossessing whole portfolios.
You only need a couple of substantial property investors going to the wall in one medium sized town and the impact of having a couple of hundred or so properties dumped back on the market in one go can have a serious effect on the local property scene.
It is a snowball effect in every way. Property investors have fixed high overheads and when the market turns against them, they pretty much have their hands tied and when the shit hits the fan, it does it in huge quantities and from all directions.
Read on to discover how this affects you and how
UK property trends are likely to go.
Of course, if you have plenty of equity in your property and don't have to move, you can watch all the drama unfold without it actually affecting you unless interest rates rise. Property prices will rise at some point in the future and in the meantime, you would be better advised to improve your current property.
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
Read on to discover which direction
UK property trends are likely to take.
