Hard For Investors To Sit Back And Relax Now

UK property investors can no longer afford to buy a home and sit back while it gains value, according to one expert. The chances of securing a profit seem bleak and number of successful sales now seems much lower.

According to Zoopla, Peter Mindenhall, researcher at IPINGlobal.com, said that the current state of the market means investors have to be more active than ever if they are to make good profits and they should look for better selling tactics at the earliest.

His comments came after Halifax reported that house prices rose by 0.1 per cent in May 2011 to an average of 160,519, but have fallen by a total of 1.2 per cent in the last three months and by 4.2 per cent in the past year.

Mr. Mindenhall said that many short-term investors attempting to 'flip' property at the present time will be finding it tough going, while those exposed to high loan-to-value mortgage products will be fearing negative equity, both of which are bad for market confidence.

He elaborated: "The days of 'just buying a property and watching it rise in value' are over for the time being". "Long-term investors with low loan-to-value mortgages or that have paid cash are likely to be less concerned, [because] even if and when interest rates rise they will still have a reasonable comfort zone" he added.

The expert added that property has "never really been sustainable" as a short-term investment, due to the fact that a potentially low volume of sales can occur within localised markets.

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