The story of how UK property investors have been affected by the recession is like football, a game of two halves, only split into multiple segments of two halves. It hit first like a Tsunami and anyone who hadn't prepared for a crash was obliterated, those who were left have had to adapt to UK property investment in the post-crash world.
In the space of a year 20% was wiped off property values on average, some regions lost less, but others lost more. For investors who had lapped up the loose-lending policies this meant real trouble, at best severe negative equity, at worst bankruptcy. For those who had taken low loan-to-value mortgages and followed other best practices for investing in UK property it was easier to swallow the loss.
After the initial correction times were hard and continue to be hard. The biggest problem was the lack of credit, normally businesses like property investment companies UK can alleviate the situation by remortgaging assets, but the so-called credit crunch ruled this out.
Recently though, we have entered a new era in the downturn. Prices are still depressed and we have interest rate rises on the horizon. On the other hand though, the construction recession has worsened the UK housing shortage, and at the same time the thousands of repossessions led to thousands more people looking for affordable rented accommodation.
Demand for affordable and quality rented accommodation has shed a whole new light on investment property UK, now rents are rising and buy to let landlords are finding it much easier to raise funds; as many banks increase their range of products in the buy to let segment. At the same time, the volume of investment property for sale UK at distressed prices, combined with the record low interest rates is leading to buying sprees from experienced investors.
It's not all peaches and cream though. Lest we forget the record low interest rate party will have to end sometime. What's more the UK economic recovery is still looking decidedly shaky, we are one of the most indebted countries in Europe, and we know what that means in the era of sovereign-debt-crises and bail-outs. No one can rule out a second-dip housing crash.
Property investment UK is at a crucial time, but arguably a good one. The crash showed how badly things can go, and what happens to those who don't follow the investment rules when this happens. All this is fresh in all our memories, investors are investing, but they are investing wisely.