By Martin Grainger

The last time I wrote, just a few weeks ago, I talked about a rising enthusiasm among investors, from individuals for the most part, for UK property.

The great concern, understandably, was yield. Yield, of course, is the great protector in uncertain times, allowing investors not only to get a good return on their money, but to hold long-term. When the market is flat or falling, it's the number one concern.

Since then, the pattern has changed quite dramatically. Yield is still very high on investors' agendas, but there is a noticeable difference about the inquiries we are receiving.

I was very careful last time not to exaggerate the appetite for buying. We were seeing experienced investors tentatively returning to the UK market, but only for truly outstanding deals - that ever-desirable combination of high yield and excellent location. That element hasn't changed.

What is different, though, is that the tentativeness has now gone. Buying enthusiasm has been ratcheted up by several notches. We are now consistently seeing the number of offers exceeding units available, especially on apartments and houses that are already tenanted and which, therefore, have a provable yield.

That's the first very clear change.

The second is on price.

Whereas just a few months ago it was common to see buyers coming in significantly below asking price, that is often no longer the case. A 170K offer for a 200K property would be normal. Now, far more people are seemingly happy to pay the asking price rather than risk losing the investment opportunity. That is certainly the case for individual buyers.

The other big change, however, is that we're getting far more inquiries for bulk purchases, from people with finance in place - and these buyers expect (and get) hefty discounts.

It seems to me that many investors who haven't bought anything in the UK for three years or so, but who already have fairly substantial portfolios, now believe this is the right time to return to the market.

When I say bulk deals, I'm talking about maybe 20-plus units, both apartments and terraced houses.

The most over-subscribed deals are - it will surprise no-one to learn - in the south east and London, a few are more than 100% over-subscribed. Again, though, it depends on yield. In London we're now able to locate units offering 7%+ yields and 8%+ outside. What most people want are a strongly attractive mixture of discount and high yield, especially if buying in bulk.

The right kind of stock is coming mainly from insolvent funds or large investors looking to deleverage by divesting part of their portfolios.

The hottest locations are, without doubt, the highest quality ones - north London, Islington, Camden and central London - here units are being snapped up.

I'd like to add another word or two about location. While it's undeniably true that London is hot, we're also seeing some very attractive deals coming through in Manchester and the North West.

That may surprise some people who have grown used to tales of vast over-supply of apartments in the centres of these cities. And certainly there has been and still is over-supply. But we need to put this into context. These locations have been overwhelmed in many people's minds by negativity.

But the truth is these cities have been over-supplied with over-priced units. That is the key: price.

There is strong demand for rentals in these locations and because developers have been forced to slash prices, we are now seeing units renting with superb yields, of 8, 9 and 10%. And these are units that are already tenanted, remember. Clearly, they are long-term buys because we are unlikely to see much capital growth in the near future, but the strong rentals make them extremely attractive to the yield-driven investor.

I must wrap up with a few words of warning.

First, on location. We're seeing an awful lot of stock that looks cheap but that we wouldn't touch with a barge pole because it's in a poor location, by which I mean it isn't going to see economic recovery anytime soon. That's the criterion we look for. Over-supply of stock can be accounted for by price adjustment, as we've seen in Liverpool and Manchester, but if an area is blighted and has little prospect of economic recovery, demand - rental or purchase - will just not pick up, pretty much at any price. Not a place to invest. So, I would warn anyone to be very careful about investing on price alone, however tempting it may appear. Quality locations rule, is the PS motto.

All the serious investors we are now dealing with, they all began by building portfolios of quality properties in strong locations - that's without exception. I'd advise anyone looking at today's market, which undoubtedly offers some superb opportunities, to do the same: focus on quality locations in order to be well-positioned for the market's upturn.

Read more of Martin's articles in Your Property Network magazine.

To speak to Martin about available UK property for sale, call +44 (0)1270 539576. Alternatively, email pdm@propertysecrets.net for more information or to request a call back.