Anyone read the FT article today on the house prices crashing in next 1-2 years? pretty gloomy basically but I'm sure there will still be bargains to be had. Any views? https: / /registration .ft .com /registration /barrier?referer=http: / /www .ft .com /home /uk &location=http%3A / /www .ft .com /cms /s /58a3cd32 -79a3 -11db -90a6 -0000779e2340 .html

http: / /news .bbc .co .uk /1 /hi /business /6172088 .stm

My view is that if you are buying UK property as an investment right now then you are making a mistake - especially if you are borrowing heavily to do it. There are better and less risky investments around.

My current strategy is to buy/rennovate and sell in a short timescale (2-3 months. I tend to buy cash so no debts to have to pay interest on. I'm just not comfortable buying abroad and can't face the hassle of tennants

Hello Haf This is such an old topic we should errect a memorial to it! 1999 was the first prediction of a UK property crash - and every pundit since has had a go. I note that the article says REAL house prices will fall. This means he is predicted that average house price growth for the next few years will be around 2% vs 2.5% for inflation (say). He is not predicting a 20% fall in prices - as per the economist in 2002 etc... The problem with this view - as you make clear by your later post - is that it ignores opportunties to buy under current valuations (ie a refurb) which is where you are focussed - and our book (available free on this site) Property Developer Secrets is about. I agree that the UK (and Spain too) is a refurb opportunity at the moment. It is NOT an off plan opportunity. If you want off plan - go to Poland or CEE. Cheers Neil

BTW - I think UK property prices will probably continue at around long term growth rates of 4 to 5%. London will do considerably better - some regions and cities (central manchester for example) will do considerably worse. Cheers Neil

Haf, Out of interest - what kind of profit do you see on average from this kind of refurbishment? It's something I've never considered before. Is it a consistent rate of return? Have you ever had to sell at a loss?

I'm relatively new but have found that if you can buy and close very quickly (either desperate sellers via agents or auctions) and you are selective about the property (i.e need cosmetic overhaul in the main) and you have access to some DIY type people who are not going to charge a fortune then there is definatly a 15%ish profit to be made over a 3-4 month time frame. It does require lots of research and trauling through auction listings as well as getting pally with a few estate agents but can be made to work.

Haf, I agree with what you are saying. I have refurbished properties successfully over the last year for 15-25% profit. The trouble is if you are raising finance to do this then buying, finance and selling costs are considerable. Add stamp duty for more valuable properties and it becomes even more difficult. I reckon that for every below market value refurb property I buy I have looked at 30 to 40 properties. Once you have the contacts of course then it becomes easier. Agents take you seriously and get to know your criteria. On the auction front, I have all but given up wasting my time viewing scores of properties only to see them go at a price that would make me zero profit. So, worth it in the end but hard work all the same. Peter

Frankly this discussion is all 'crystal ball' territory and nobody really knows for certain what will happen. Sure, over the long term 4 to 5% p.a. growth seems reasonable. The question is more about what will happen in the short term however - say over the next 5 years. If you asked a selection of experienced property investors whether they thought the UK property market was undervalued or overvalued at the present time, I bet most would plump for the latter. (Nothwithstanding the fact that there is always money to be made in any market e.g. renovating, development etc.) All the best, Dave.