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UK Gets a Dash of BMV Spice

April 28, 2010Article by Ray Withers

International property investment consultancy Property Frontiers have become the latest company to offers its clientele a selection of BMV property deals. In a press release issued by the firm, company director David Cox said:

“We have partnered with a company involved in the financial side of the property market, in order that we gain access to their stocks of below market value properties, in return for our assistance in selling said properties in a timely fashion.

“There are many websites out there claiming to sell below market value property, but when you look closely the value is below what it was at the height of the boom, while these are often being sold at current market values, they are not below market value in the current market. We have gained access to genuine UK BMV properties, with solid cash-flow projections and viable exit strategies.”

The press release then went onto explain why investment in such deals is currently not only intensifying, but also an incredibly good idea.

The UK property market has been on a rollercoaster ride since 2007. In 2008 it experienced its darkest days in more than a decade, but by March 2009 prices were rising again, and continued to do so throughout the year. Now there are doubts over the sustainability of this growth in 2010, but BMV property deals exist outside all of that.

Prices rose because of short supply and low interest rates. Meanwhile the economy was still crippled and thousands of jobs still being lost. Because of this properties continued to come onto the market at massively discounted prices, either because they had been repossessed or because the owner was selling to avoid such fate.

Either way, this brought about two things that strengthened the potential returns from UK property investment: properties at massively reduced prices, and increased demand for privately rented accommodation. Demand for rental accommodation was of course being further increased by the lack of mortgages, and the lack of first time buyers with a substantial deposit. And, of course this was on top of the fact that prices had already fallen much faster than rental rates.

All in all yields on UK property investments are currently higher than they have been for many years. And they are set to continue increasing, for the short term at least, because of two main factors:

1. Builders went into hibernation during the recession and market crash, this shortened housing supply, when need for housing is and will continue to grow

2. The rises in UK house prices since last March, while wages stagnated and even fell, has pushed the average house price up to 5.5 times the average salary, pricing people out of buying and into renting

Author

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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