Not a decline in prices but a decline in stock.

 

For every 10 properties that come off the market 8 get put on.  That is a net decline of 20%.  So the total number of properties for sale, ready to buy now is reducing by 20%.

 

This is data from Rightmove so we can assume there is no statistical bias there since they are so big.

 

I hope the government is listening to this.  Reducing stock is a double edged sword.  It means the decline in house prices will be pretty much halted if they have not been already.  It will keep property prices up due to the simple equation of supply and demand.

 

Problem is if no one wants to sell or no one is forced to sell then property buying is reserved for the RICH!  The ones with either:

 

Equity

Cash

 

So where does this leave the investor?  Well the good thing is we are now a rare breed.  If you are still in to buy to let you are considered a mug.  Little do these people know that buy to let is a LONG TERM proposition.  However lets not get in to that!

 

So few investors, few properties for sale and few buy to let mortgages has just propelled buy to let in to the Niche category.  Or should I say the connoisseur category.  Great!   Within the banking and financing circles property investors are considered the elite.  If they have survived the crash and want to buy more then they obviously know what they are doing.

 

So how can us investors buy?  Well the secret is in getting a good discount to market value to create the equity.  Our scouts are doing this.  Now all they need to do is get a 25% discount to create the deposit.  So a £100k property needs a £25k discount.  Or a £60k property needs a £15k discount.  Not too scary.

 

So the search is really on now.  Only the best sourcing companies and scouts can survive as the hunt is becoming a treasure hunt!  For the next few months volume will be low.  Until government intervention we can expect the movement of property between individuals to be low.

 

If you want to get access to some heavily discounted deals then get in contact.  I was in the office on Friday and a total of 10 deals from 3 different scouts were due in today!

 

Ajay

Posted on: 21st Sep 2009