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Why Buy UK Below Market Value Property?

April 2, 2009Article by Ray Withers

With falling prices, why is now a good time to invest in residential property for letting?

Well, there is no time like the present, because in many of our lifetimes, property is about as cheap as it is ever going to get. The basic driver for UK property investment is people need houses and the fact is, there are just not enough of them, nor is there likely to be for many years. Home ownership is locked in to the British psyche, and in the medium to long term – that’s five to 15 years – values will rise.

After the last housing crash, it took almost six years for the distressed UK property market to start rising at a decent rate again.

The credit crisis is not really hurting UK property investment . Only the speculators who overstretched themselves after being swayed by the hype of buying ‘off plan’ are feeling the real pain because they paid too much for a property that lets out for too little rent top cover their costs. The other factor to consider is how badly many house building companies are faring and how long they will take to recover. For most sensible investors, if you have the cash to buy or access to funding, then picking up below market value property is worth considering.

What will you get for your money? Specialist Property Frontiers have two developments available that offer typical new build homes below market value in the UK:

Merchants Court, Wavertree, Liverpool

this is an exclusive below-market-value deal with 30 two bedroom apartments at up to 25% discounts.

The apartments are new and fitted out ready to rent and prices start at just under £90,000. Last year, identical property was selling for £135,000. Wavertree is a popular Liverpool suburb. Merchants Court is a short stroll from the high street, station and top class sports facilities. The city centre is 10 minutes away by train. Gross yields here are expected to lie between 7% and 10%.

The Shrubberies Mews Townhouses, Southwark, London

This is another exclusive development of a small, gated community of just eight townhouses. The developer is offering a massive £75,000 on the certified valuation – bringing the asking price down to just £300,000.

The houses are open plan on the ground floor and have two double bedrooms and a family bathroom upstairs. Again, they are a short walk from local shops and stations. The City and West End is within easy reach by train Gross yields of 6% at £18,000 per year are expected from the development.

Both these developers are selling at more or less the price of the land plus build costs to clear the properties from their books. Independent valuers have certified the property prices.


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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