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Plenty of Below Market Value Properties

February 23, 2011Article by Ray Withers

There are over 10 million results listed in Google.co.uk for the term below market value properties, this is compared to over 8 million results for the term toy shops. This is a testament to the massive volume of below market property currently available on the UK and international market.

The first part of the noughties witnessed the first ever global real estate boom; previous to this the cyclical asset class had rarely worked in unison across national borders, let alone continents and certainly never for the entire world. It is almost poetic that the first ever, and also grand global property boom, would be followed by the first ever, and equally powerful global real estate crash.

Anyhow, that is why we are now faced with massive volumes of below market properties. The UK is expected to yield some of the best bargains in the world in the coming year(s).

Some will be scoffing at this, but they are being called the market bulls at the moment, as they bullishly shout about the worst being over.

Many believe the opposite. The UK’s austerity measures are only just beginning to bite and we know that millions of public sector jobs are still on the chopping block. Thousands more people are still on frozen pay, and the unemployment rate of around 8% is still way to high for a healthy housing market. What’s more the price rises in 2009 cancelled out the previous correction and left UK housing still overvalued at over 5 times the average salary.

Finally, the banks are continuing to tighten their lending criteria, it has just been revealed that they are lending 10-20 percent less to families with kids than childless couples, because of the costs involved with raising a child. And if that doesn’t get your back up then how about them factoring in your gym payments. Not to mention the fact that the Financial Services Authority is still debating whether it should take further measures to tighten lending.

In short, buyers will remain scarce throughout the year. This will continue to put sellers under pressure to drop their prices. At the same time the public sector job cuts could bring new distressed sales and even repossessions. All this points to a high level of below market value properties coming up for sale in the UK.

The public sector job cuts will be mainly in the north. Many believe favour the south for property investment in the UK, but recent figures show this may not be the best policy. According to data just released by the Halifax while prices in the UK as a whole rose 91% between 2000 and 2010, prices in the north increased by 130%.


Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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