Upsides to the downturn for property investors

imageThe uncertainties facing the market in 2012 will create unexpected bargains for keen-eyed property investors. Graham Norwood explains how to make the most of the tricky year ahead. New Year resolutions tend to be about losing something from your life. Weight, cigarettes, or that third glass of wine. But canny house buyers will be doing just the opposite; using 2012’s uncertain outlook to make fresh fortunes from anticipated price cuts.

Industry pundits say values in most areas will tumble by as much as seven per cent in the year to come. This is thanks to a triple whammy of rising unemployment, public sector cuts and a weakening UK economy. Add in the effect of inflation, currently at five per cent, and the price fall could be the equivalent of 12 per cent, or £60,000 on a £500,000 home.

Even estate agents admit the market is on the ropes in many areas. Grainne Gilmore, head of research at Knight Frank, sums it up: “To achieve sales, vendors will have to cut their prices.”

But there are two sides to today’s challenging market. Every seller’s panic price cut can be a buyer’s bargain opportunity.

One person hunting for a good deal is businessman Paul Beamish, who believes the downturn is the perfect time to upsize. Next week he is putting his three small homes on the market. He owns a farmhouse in Bury St Edmunds, a Norwich town house and a holiday cottage in Gloucestershire. Their combined value is about £1.2 million.

New Year resolutions tend to be about losing something from your life. Weight, cigarettes, or that third glass of wine. But canny house buyers will be doing just the opposite; using 2012’s uncertain outlook to make fresh fortunes from anticipated price cuts.

Industry pundits say values in most areas will tumble by as much as seven per cent in the year to come. This is thanks to a triple whammy of rising unemployment, public sector cuts and a weakening UK economy. Add in the effect of inflation, currently at five per cent, and the price fall could be the equivalent of 12 per cent, or £60,000 on a £500,000 home.

Even estate agents admit the market is on the ropes in many areas. Grainne Gilmore, head of research at Knight Frank, sums it up: “To achieve sales, vendors will have to cut their prices.”

But there are two sides to today’s challenging market. Every seller’s panic price cut can be a buyer’s bargain opportunity.

One person hunting for a good deal is businessman Paul Beamish, who believes the downturn is the perfect time to upsize. Next week he is putting his three small homes on the market. He owns a farmhouse in Bury St Edmunds, a Norwich town house and a holiday cottage in Gloucestershire. Their combined value is about £1.2 million.

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